Seven out of 10 (71%) investors anticipate a global equity market correction of more than 10% within 18 months.

Nearly half (47%) expect it to happen within a year, according to new research by Managing Partners Group, the international asset management group. Only 12% expect no correction at all.

A third (32%) of those who anticipate a correction expect it will mean a fall in equity prices of up to 30%. Over a third (36%) expect a drop of between 10% and 15% and nearly another third (28%) expect the fall to be between 15% and 20%.

Twenty percent of respondents have reshaped their portfolios in response to the anticipated correction. 

Jeremy Leach, chief executive officer, Managing Partners Group, said: “Equities are looking highly valued on both sides of the Atlantic and it looks as though the market is just looking for an excuse to correct. 

“Our research shows that a substantial proportion of investors now expect this to happen and many have already reduced exposure to equities while looking at alternatives. Hedge funds and real estate are obvious targets but it is also interesting that a fifth (20%) of those who have already adjusted their portfolios raised exposure to asset-backed securities.” 

The  reason for a predicted slump is fears that equities are overpriced, which was cited by 37%. Other reasons include include an unexpected global event (33%); a geopolitical crisis such as North Korea (27%),  a rise in interest rates (25%),  a financial crisis in China (24%); the reduction in quantitative easing (18%), a financial crisis in Europe (16%), western governments’ excessive debt (6%),  and a collapse in bond markets (4%).