Investor appetite has swung back in favour of riskier assets over the last six months, with 55 per cent now overweight in risk assets compared to only 17 per cent six months ago, according to research by Schroders.

The survey was conducted at Schroders' Investment Conference in October and found that not only were 55 per cent of the 90 intermediary clients in attendance currently overweight in risk assets, such as equities, commodities and corporate bonds, but only 15 per cent were underweight, compared with 46 per cent at the same conference six months ago.

Furthermore, the majority of clients (36%) said emerging market equities would be their top asset allocation recommendation for late 2009/2010, and 26 per cent opted for emerging market debt.

Richard Mountford, who is head of global intermediary at Schroders, explained that the economic upheaval over the last year has driven most investors to invest in what are considered safer asset classes, such as cash and government bonds. "However, risk appetite has returned to markets over the summer and exposure to higher risk assets has increased. This has been reflected recently by the equity rally and narrowing bond spreads and also by the strong sales of Schroders' Euro Corporate Bond and Commodity, two of top selling funds YTD."

In respect to emerging markets, Alan Conway, head of emerging market equities at the firm, added that despite these economies having gone through a similarly difficult 12 months, they have recovered strongly and are once again outperforming developed markets. "We believe they continue to offer attractive investment opportunities as economic fundamentals for many emerging countries remain much stronger than for the developed world, with superior GDP growth potential and lower levels of debt."

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