One in five investment managers (19%)
worldwide thinks the global economy will strengthen in the next 12
months, although their pessimistic view on Europe continues, Bank
of America Merrill Lynch’s monthly fund manager survey has
found.
The survey revealed 11% of fund managers and
asset allocators predict higher global corporate profits in the
coming year, up from 7% in June.
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Gloomy Europe
Sovereign debt fears led to a high level of
pessimism over the European economy with 64% of respondents
identifying the EU sovereign debt funding as the number one tail
risk, a 21% increase from June.
A net 22% of investors in the region expect
Europe’s economy to weaken in the coming 12 months.
A net 57% of European fund managers and asset
allocators are now underweight in banks, a 24% increase from
June.
Unexpected shifts
According to the survey, equities enjoy a
rollercoaster ride for the third month with 35% of investors being
overweight in equities in July versus 27% in June and 41% in
May.
At the same time, a net 45% of asset
allocators are underweight in bonds against a net 35% in June and
44% in May.
The survey, which was conducted 8 July to 14
July, consisted of responses by 265 panellists with $792bn of
assets under management.
