Investors less bearish on growth

Fund managers are more positive for global growth and have started to invest more in capital markets with the US and emerging economies picking up the largest flows.

A regular Bank of America Merrill Lynch (BoAML) survey of investors shows that the amount held in cash by fund managers fell from a 15-year high of 5.8% in July, to 5.4% in August.

A low and stable interest rate environment is a “big factor driving fresh optimism” and there is a preference among fund managers for deflation assets over inflation assets, said BoAML, though a record 48% of investors think global fiscal policy is currently too restrictive.

Allocation to Eurozone equities remains low at a net 1% overweight, with investors seeing EU disintegration as the biggest investment risk.

Allocation to UK equities remains underweight, though less than last month, moving from a net 27% underweight to a net 21% underweight.

Allocation to emerging market equities has improved to a net 13% overweight – its highest level since September 2014.

Allocation to US equities is at its highest since January 2015, at a net 11% overweight.

“Investors are less bearish, but sentiment has yet to shift from ‘fear’ to ‘greed’. As such, we expect stock prices to rise further until bonds throw another tantrum,” said Michael Hartnett, chief investment strategist at BoAML.

The survey of global investors had 181 respondents, including portfolio managers and chief investment officers.

©2016 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

Innovative US companies are providing some of the solutions to the climate crisis and transition to a more sustainable economy. We see potential opportunities in areas including renewable energy and…
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

IRELAND SPOTLIGHT

Visit our dedicated Ireland channel for all the latest news and analysis on the country's investment industry.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST