From 9 to 13 January, we sent a New Year’s survey on capital market expectations in 2020 to finance professionals who are on the distribution list of our events at MehrWertpapiere.de. As of the reporting date, 846 participants have cast their votes, which is why significant statements are already available. We are very proud that 24.9% of the recipients decided to participate in the study. This speaks for great interest. At this point, we would like to thank each and every participant!
Unfortunately the results are only available in German, however most results are self-explanatory.
Question 1: Which asset class is your favorite?
At 58%, equities are in first place among the majority of participants, followed by real estate with just under 12%. In times of zero interest rates, no further price potential is seen for bonds, which would only be realised if interest rates were to become even more negative. This means that tangible assets are still the most in demand. This is also in line with the portfolio breakdown that we determined in the next question.
Question 2: How is your portfolio divided?
At just under 44%, equities are the most important component in the private portfolios of finance professionals. In my view, this is particularly remarkable because the financial sector often holds much lower equity quotas for its clients for regulatory reasons. In the survey of institutional investors on investment behaviour in 2018 conducted by the Scope analysis company, institutional investors accounted for only 5% of equities. Real estate followed in second place with 21% portfolio share. The financial professionals therefore prefer tangible assets themselves. Interestingly, Bitcoins have a share of 1.2%. However, only 76 of 846 participants have Bitcoins in their portfolio. Among these investors the Bitcoin share is 13.2%.
Question 3: What do you think will be the winning region in 2020?
Question 4: Which industrial sector is your favourite for 2020?
Question 5: Top share – Which DAX stock will win in 2020?
Question 6: Flop stock – Which DAX stock will lose in 2020?
With the exception of Fresenius, every DAX share is on both the top and the flop list. In terms of net positions, SAP is in first place (Top 115, Flop 2). Wirecard follows (Top: 167, Flop: 107) ahead of Fresenius Medical Care (Top: 45, Flop: 1). Deutsche Bank (Top: 39, Flop: 214) is at the bottom of the list, ahead of Lufthansa (Top: 5, Flop: 61) and Volkswagen (Top: 14, Flop: 63).
Question 7: Where does the DAX stand on 31.12.2020?
On average, the survey participants expect a DAX price of 13,786 at the end of 2020, which is a moderate increase of 2.7% compared to the closing price of 2019. After the large gains in equities last year, many investors are obviously more cautious. It seems somewhat incomprehensible why 58% of those surveyed see shares as the best asset class and then estimate only this value for the DAX.
Question 8: Where does the Bitcoin in USD stand on 31.12.2020?
The survey participants expect an average Bitcoin price of USD 7,817 at the end of 2020, an increase of 8.5% compared to 2019. Although on average Bitcoins have a higher return expectation than equities, equities dominate the question of the best asset class with 58%. Perhaps this inconsistency can be explained by looking more closely at the data. If you differentiate the question and look only at the 76 investors who actually have Bitcoins in their portfolio, you will find a much higher expectation. On average, a Bitcoin price of USD 13,779 is expected in this target group (+76%). Perhaps the strong return expectations of Bitcoin fans thus distort the overall picture.
Question 9: Do you personally see opportunities or risks in the following megatrends?
Participants see the greatest opportunities for themselves personally in the area of health and nutrition, just ahead of the topic of digitisation and employment. I find it remarkable that there is obviously no fear of robots or disintermediation in the financial sector. Almost equally important are the individualisation of consumption, mobility and transport and also equal rights for women. We are very pleased that equal rights for women are seen as an opportunity in the financial sector, where one woman is confronted with 17 men in the executive suite. The greatest risks are seen in the area of wealth inequality. According to this, people are very concerned about the shift of the world order to Asia and global security.
Question 10: What probability do you give the following events in 2020?
With an average of 83%, Brexit is most strongly expected by the capital market. First of all, the re-election of Donald Trump is expected immediately afterwards, with an average of 66%. The US stock market has risen by almost +60% since his election in 2016, which is perhaps why financial professionals are thinking particularly positively here. Negative interest rates of 64% are expected for German savers. At 15%, the ECB’s issuing of helicopter money to citizens seems particularly unlikely today, followed by the bankruptcy of a major German bank (22%). A trend reversal on the real estate market is also rather unlikely from the participants’ point of view, at 25% on average.