Investors are backing China to deliver the highest equity market returns in 2017, according to a poll carried out by Moneywise's parent company Interactive Investor.
In a poll of over 9,000 investors, the majority (28%) tipped China to top the stock market league table over the next 12 months, closely followed by Europe, which took 25% of the vote. In third place was Latin America (14%), followed by Japan (13%).
China's stock market - the Shanghai Stock Exchange - has lost 12% year-to-date, having been unable to claw back the heavy losses it sustained in the first two months of the year.
Traders took fright amid concerns that China's economy would suffer a hard landing. But since the sell-off, these fears have subsided somewhat, helping the market drift quietly higher.
UK and US overlooked
The UK and US were overlooked as attractive options for 2017, in stark contrast to this time a year ago, when the two regions topped the Interactive Investor poll.
The UK was tipped to fare best in 2016, and overall it has been a good year for investors who stayed the course. The FTSE 100 is up 12% year-to-date, while the broader FTSE All-Share index has gained 10%.
As we approach the start of 2017, however, investors are adopting a pessimistic stance ahead of Britain's divorce negotiations with the European Union, beginning in earnest in March.
Of the investors polled, just 8% said they expected the UK to deliver the highest equity returns in 2017.
The US stock market, which has also fared well in 2016, polled an even lower percentage of votes cast, with just 7% tipping the region.
The S&P 500 is up 11% year-to-date and, despite financial commentators widely predicting the market financial markets would fall heavily in the event of a Donald Trump victory, a correction has not materialised.
US looks pricey
Some US fund managers, however, have cautioned that the equity rally "may be getting ahead of itself".
Jenny Jones, a fund manager at Schroders, adds that investors have been focusing on the positives a Trump presidency will bring, as opposed to the various threats and dangers. Furthermore, when it comes to valuations the market does look pricey.
Commenting on the poll results, Rebecca O'Keeffe, head of investment at Interactive Investor, says: "UK investors who have been long the dollar have seen their results magnified in 2016, with local currency market returns in the US of around 9% providing a 29% return in sterling terms.
"Our investors who followed through on their predictions of positive returns for the UK and US in 2016 should be set for a very happy Christmas.
"Given these moves in both equities and currencies in 2016, it is not surprising to see this reflected in our investor base's revised outlook for 2017. With US stocks at record highs and the UK heading into the unknown, our investors appear to be shifting their gaze elsewhere.
"An obvious place to focus is on those markets that have underperformed this year, but it is also vital that investors take a view on the underlying currency trends when deciding where to invest in 2017."
This story was originally published for our sister magazine, Money Observer.