Respondents are bullish on the outlook for developed markets in 2023 with 59 % of respondents claiming the next 12 months will be “ the year of ” this asset class versus just 29 % for emerging markets . Emerging markets suffered another tough year in 2022 amid a strong US dollar and woeful under performance of China which accounts for a large portion of the benchmark .
It has been a challenging year for investors in China following the Chinese Communist Party ’ s decision to enforce a zero-COVID-19 policy , the impact of which has trickled into markets . In the current environment , investors are extremely cautious about the outlook for the world ’ s second largest economy .
Do you expect your allocation to China to grow in 2023 ?
Yes , significantly 1.69 % Yes , moderately
No Not sure yet
ESG ETF maturity
Following the recent ESG ETF boom in Europe , respondents are planning to take a slightly more moderate approach to their ESG allocations this year . Some 36 % plan to increase their allocations to ESG ETFs in 2023 while 34 % plan to maintain the same level of exposure . ESG ETFs have continued to see demand in Europe this year despite the performance headwinds many strategies have faced which highlights the stickiness of the asset class .