Asian Pacific equities has emerged as a shock favourite among Luxembourg fund selectors, overtaking European equities as the most popular region for the year ahead.

According to a survey at Citywire Luxembourg 2018, half of the investment professionals backed Asia Pacific as the market they are most likely to increase exposure to over the next year.

This saw the region overtake last year’s favourite, European equities, which drew only 19% of the votes in this year's voting.

European equities was still ahead of North American and emerging market equities, which each received 13%, followed by global equities at 6%.

The results vary hugely from the responses given by Swiss fund buyers in Zurich last week, who backed thematic equities as the area they are most likely to scale up exposure to.

This is while Asian Pacific equities were favoured by only 10% of the audience.

Converts craze

When quizzed on fixed income exposure, convertible bonds came out on top as the most popular segment, with 40% saying they will be increasing investments here over the next year.

The segment overtook emerging market debt, which led the Luxembourg fund buyers’ agendas in 2017 but this year amassed only 33% of the votes.

The most unloved bond segment was European bonds, drawing zero votes as no selectors saw it as the area they are most likely to up exposure.

Brexit bears

When asked what will be keeping them awake at night over the course of 2018, half of the participants said they harbour fears over Brexit negotiations grinding on.

The second biggest concern among the fund buying community in Luxembourg related to Jerome Powell’s first year as Federal Reserve chair.

Meanwhile, 19% admitted to worries over a real estate bubble in China. At the bottom of the list of concerns was bitcoin volatility, as only 6% of respondents placed it as their biggest concern.