Cash allocations fell sharply in October, survey finds

October’s market correction led to cash allocations falling sharply as investors decided to take advantage of buying cheaply as markets fell.

That was the conclusion of a fund manager survey commissioned by Bank of America Merrill Lynch, which also found that average cash balances among asset management firms dropped sharply to 4.7% in November from last month’s level of 5.1%.

In addition, the report found that:
     •   a net 44% of fund managers expect global growth to decelerate over the next 12 months: the worst outlook on the global economy since November 2008
     •   a net 54% expect a slowdown in Chinese growth in the next year, the most bearish outlook in over two years
     •   investors continue to have a negative outlook on corporates: a net 29% think global profits will deteriorate over the next 12 months (a 6-year low), and a net 47% think corporate margins will worsen in the next year (a 2-year low)

The survey of 516 fund managers was conducted between November 2-8.

©2018 funds europe

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