Income tops the priority list for most property investors: Aviva

Investment professionals have noted an increased focus on income among clients across most asset classes, according to a recent survey conducted by Aviva Investors' multi-manager team. The results show that 83& of real estate managers believe clients are more focused on income today than they were previously, followed by 71% of equity investors and 67% of fixed income managers. Hedge fund managers were an exception, with only 9% citing an increased focus on income by their clients.

The survey asked fund managers based in the UK, US, Europe, Asia and Latin America for their views on the macro-economic environment, return expectations and client behaviour in 2012.

Nick Mansley, global director of multi manager at Aviva Investors, commented on the findings: 'In an environment of low cash yields and continued uncertainty around economic growth it is not surprising that investors are more focused on income. We expect this to be a long lasting theme across several asset classes. Unsurprisingly, hedge fund clients are not particularly worried about income, but more real estate managers are seeing this shift than we expected.'

Looking at return expectations in 2012, the survey highlighted that real estate managers had mixed outlooks, with the majority expecting capital returns between 0% and 10%. A further 17% expect capital value falls and 14% expect capital growth of more than 10%.

The majority (60%) of real estate managers cited market/economic conditions as the greatest challenge currently facing real estate. In response to which region of the world is currently most over-hyped, one third of the respondents said Continental Europe and Emerging Markets offer relatively poor returns in relation to risk.

More than 70% stated that global diversification is an important means to generate returns and/or reduce risk. A majority of those also said clients were interested in investing globally or internationally.