With global economic growth starting to gather momentum, Credit Suisse believes that increased risk appetite bodes well for asset managers and has upgraded its rating for London-listed firm Schroders as part of its sector review.

The broker said that global macro-economic backdrop is showing some signs of improvement with its economists expecting a slight acceleration in global gross domestic product (GDP) growth to 3.4% in 2013 which is close to the 20-year norm.

"We believe the reduced macro uncertainty should drive improved investor appetite, which bodes well for the asset managers. However, given the recent rally, we believe there may be better entry points for the most geared plays and would prefer names already displaying strong flow momentum or offering valuation appeal."

As well as upgrading European peers GAM Holdings and Partners Group, the broker has raised its rating for Schroders from 'underperform' to 'neutral'.

Credit Suisse said that the decision was "driven by our more positive stance on net inflows into equities across retail and institutional clients, increased demand for multi-asset products and potential for revenue margin uplift following multi-year declines".

In contrast, the broker has cut its recommendation for Ashmore from 'neutral' to 'underperform', saying that it sees downside risk to consensus net flow forecasts, pressure on net management fee margins from rising competition.

Hargreaves Lansdown is also rated 'underperform', while stocks rated 'outperform' include Aberdeen and Henderson.

BC

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