The quarterly figures show that 50 per cent of respondents now rate the asset class as undervalued, compared to 39 per cent in the second quarter of 2012, and 48 per cent of respondents said emerging market equities were now undervalued, compared with 43 per cent in the second quarter of 2012.
Will Goodhart, chief executive of CFA UK, said: “A greater proportion of our respondents now rate equities as undervalued over one year than they did in January.
“With no obvious improvement in the wider economic background, this shift is likely to reflect a repricing of fair value for equities, driven by the continued decline in bond yields.’’
Government and corporate bonds continued to be seen as overvalued with 46 per cent of respondents stated that government bonds were now very overvalued relative to fair value, compared to 38 per cent who held that view six months ago.
Mr Goodhart added: “As prospective returns from fixed income continue to fall, the relative attractions of equities, regardless of market, appear to have increased.”
Rosemary Heaversedge, principal of Shrewsbury-based Shropshire Independent Financial Services, said: “Regardless of market sentiment, I am using multi-manager funds more as, generally speaking, it is difficult for IFAs to be able to cope with big investment decisions.
“The markets are changing all the time and it can take a long time before an IFA is able to move a client’s individual investment, with all the notification process. Also a multi-manager approach provides diversification. Many clients may need the regular income that comes from bonds and dividends, regardless of what the current valuations are on bonds or equities.”