Fund managers are optimistic about a global economic recovery

A growing number of fund managers are optimistic that the economy is recovering — despite a recent sell-off in bonds, according to a survey.

Fully 62% of respondents said this month that they thought that the global economy will improve in the next 12 months, up from 57% in May, according to the survey released today by Banc of America Securities-Merrill Lynch Research of New York.

Just 7% of those surveyed said that they thought that a new recession would occur in the coming year, down from 38% last month.
“Investors are currently ruling out the prospect of the much-feared double-dip recession and have shrugged off the weakness in bonds,” Michael Hartnett, Banc of America Securities-Merrill Lynch chief global equity strategist, said in a statement.

In response to investors’ growing confidence, managers were moving out of short-term holdings.

The number of managers who were overweight in cash fell to 12% this month, from 20% in May. Also, 49% of those surveyed said they thought that the outlook for corporate profits would improve in the coming year, according to the report.

For the first time since December 2007, a majority of managers were overweight in equities. Their investments focused on energy and technology, the survey found.

In addition, 62% of managers said that they expected China’s economy to improve in the next 12 months, up from 1% in May.

The monthly survey reflects the views of 410 money managers who responded between June 5 and 11.

The survey was conducted with assistance from TNS Global Worldwide, a London-based market research firm.