Investment in equity funds will soar over the coming 12 months, according to the latest research report from Prudential.

The poll – a result of interviews with 100 financial advisers – found that 72 per cent of those interviewed were expecting an increase in the number of clients looking to invest in equities over the coming year.

Despite those surveyed sounding optimistic for increased inflows into equity funds, it would appear that the majority expect their clients to invest in cautious products due to continued economic volatility.

Almost three quarters (73 per cent) expect clients to invest in cautious managed growth funds, with two thirds (66 per cent) expecting to see investment in defensive funds.

Seventy per cent believe that investors will also look to spread risk by buying into multi-manager funds.

Andy Brown, director of investment funds at Prudential said that given the performance of markets in the second half of 2009, it is hardly surprising that the majority expect to see more clients returning to equity funds.

He explained, ‘In reality not all equities will show equal growth over the coming 12 months and choosing the right time to invest in the right asset classes is key.

‘We share the views of the IFAs surveyed and believe that good fund managers and balanced portfolios will do well in 2010 and beyond as investors look to build portfolios to deliver both performance and security.’