Apocalypse no more: Portfolio managers turn bullish on equities
Optimism among portfolio managers reached a six-year high this month, causing them to dip into cash reserves and buy more equities, according to the results of a survey released today.
Optimism among portfolio managers reached a six-year high this month, causing them to dip into cash reserves and buy more equities, according to the results of a survey released today.
Three-quarters of fund managers surveyed on behalf of Banc of America Securities-Merrill Lynch Research said they believed the global economy would improve in the next 12 months, up from 63% in July.
That’s the highest level of optimism since November 2003, when 78% of managers reported being optimistic about the future.
The survey, conducted online from Aug. 7 through Aug. 12, involved 294 fund managers overseeing a combined $924 billion in assets.
Reflecting the managers’ optimism, the average cash positions of their portfolios fell to 3.5%, from $4.7% in July, the survey found.
At the same time, equity allocations rose, with 34% of respondents reporting that they overweighted equities, up from 7% in July.
Thirty-three percent of respondents said they prefer to overweight emerging markets, down from 48% in July.
Technology remained the leading sector, with 28% of respondents overweight in that sector.
“Strong optimism in August represents a big turnaround from the apocalyptic bearishness of March,” Michael Hartnett, chief global equities strategist at New York-based Banc of America Securities-Merrill Lynch Research, said in a statement.
However, global fund managers remain concerned about the bank sector. They reported a 10% underweight position, down from a 20% position in July.
The survey was conducted with help from market research firm TNS Global Worldwide of London.
Learn more about reprints and licensing for this article.
