Investors increase exposure to US and emerging markets

16 Nov 2011 | News - Comment now

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Investors increase exposure to US and emerging markets

Fund managers increased their exposure to the US and emerging market equities in October and turned away from the troubles in the Eurozone, a new survey has revealed.

The proportion of investors overweight in US equities soared to 20 per cent in October from 6 per cent the previous month, according to research by Bank of America (BofA) Merrill Lynch.

The survey found that 27 per cent of investors were overweight in the region, up from 9 per cent in September, while the Eurozone remained the least popular region among respondents, although the proportion of investors underweight in Eurozone equities was down just one percentage point to 30 per cent.

Some 5 per cent of respondents said they were underweight in equities in October, down from 7 per cent.

Michael Hartnett, chief global equities strategist at BofA Merrill Lynch research commented, ‘Investors are showing belief in emerging market growth and US resilience, which is key to retaining positive global sentiment.’

The report revealed that fears of a global recession have eased, as 31 per cent of investors said they expected the world economy to avoid a recession, up from 25 per cent a month earlier.

Exposure to emerging market equities showed increased faith in the strength of China’s economy, BofA Merrill Lynch said, as more than three quarters of the investors surveyed, or 78 per cent, said they expected a soft landing in the country.

Fears of inflation in emerging markets also subsided in October, as a regional survey of investors from Asia Pacific (excluding Japan) showed that 59 per cent believe inflation will fall in the coming year.

In total, 258 panellists with $665 billion (£422 billion) of assets under management participated in the survey. Overall, 188 managers, managing $328 billion (£208 billion), took part in the regional surveys.

Related topics: Emerging markets, Fund managers BofA Merrill Lynch

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