The worsening sovereign debt situation and general global uncertainty are beginning to effect the general outlook of the country’s Chief Investment Officers (CIO) according to the latest Financial Services Council Chief Investment Officer Index.

 

The survey of CIOs from the Council’s members show that sentiment has fallen from the March quarter as the positive outlook for equities is outweighed by an increasingly down graded view of the global market.

 

On a scale of -100 to 100, CIOs rate the investment outlook for the next year as -2, down from 16 in March and 20 in December 2011.

 

John Brogden, CEO of the Financial Services Council said the European sovereign debt crisis is beginning to outweigh a positive view of Australia and the Asia region.

 

“The continued downward trend in sentiment reflects the ongoing and worsening sovereign debt crisis in Europe.  While fund managers had remained positive overall during the European crisis as it unfolded through 2011, the latest machinations have seen overall sentiment dragged into negative territory”, Mr Brogden said.

 

The view on Australian and international equities remains positive. Despite falls in global equities markets in May, CIOs believe company balance sheets remain strong. The overall negative sentiment reflects the negative view of international and domestic fixed income, which is outweighing the positive view on equities.