Survey: Hedge Fund Managers Bullish on S&P 500, Mixed on MSCI, Gold

Jan 7 2015 | 1:00pm ET

Hedge fund managers are bullish about the S&P 500 in 2015, according to the fourth annual institutional hedge fund manager survey released by consulting group Aksia. 

The company polled 187 hedge fund managers, with a combined $1 trillion under management, over the last two months of 2014. The results show that 71% of managers expect the S&P 500 to return up to 10% for the year, while 3% of managers expect the index to surpass this figure.

Roughly 23% of those surveyed said they expect the index to fall in a range of 0% to -10% for the year. Meanwhile, 1% were very bearish, predicting a decline of more than 20% on the year.

On the international front, 51% of managers said they expect the MSCI Emerging Markets index to provide a return up to 10%, while 28% expect a decline up to -10%. Nearly 23% expect the index to return double-digits for the year.

Respondents were also divided in their expectations for the Nikkei 225 Index in 2015. Roughly 24% of respondents said they expect the Japanese index to fall by up to 10%, while another 23% said they expect the index to jump between 10% and 20%. The balance of the respondents said they expect the Nikkei 225 to return 0% to 10% this year. Just 2% predict a rise of more than 20% for the index.

The majority of respondents were also bearish on gold for 2015. Roughly 44% of respondents predicted that gold would decline from zero to up to 10%, while another 10% forecasted at least a double-digit decline.

According to the survey, 39% predicted a gain up to 10%, while another 7% predicted double-digit gains for gold this year.

Aksia also surveyed managers’ expectations for a number of geopolitical and monetary events.

Here is a breakdown of their additional findings.

  • 86% believe the U.S. dollar will be the best performing currency of 2015;
  • 76% believe that the VIX will peak in a range of 25 to 50 this year;
  • 76% believe the European Central Bank could purchase government bonds this year;
  • 71% do not expect the default rate for U.S. corporate bonds to exceed 5%;
  • 71% expect the U.S. Federal Reserve to raise interest rates by 0.5%;
  • 59% expect inflation in Japan to remain below 2%;
  • 56% expect 10-year U.S. Treasury Bond yields to surpass 3%;
  • 6% believe there will be any departure by a nation from the Eurozone in 2015. This is down from 73% of respondents who believed there was a possibility of such an event in 2013.

The full results from the survey can be accessed here.


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