21/01/2016
Skepticism dominates among investors
p { margin-bottom: 0.25cm; line-height: 120%; } Investors, highly preoccupied by the outlooks for growth in China, are much less optimistic about global growth, according to the latest BofA Merrill Lynch Fund Manager Survey, carried out between 8 and 14 January, covering a sample of 211 respondents, representing cumulative assets of USD610bn. Only 8% of managers surveyed predict that the global economy wills trengthen in the next 12 months, a level not seen since 2012. Despite this rise in pessimism, only 12% of the sample predict a global recession in the next twelve months. However, the slowdown in Chinese growth represents, by far, the greatest risk in the eyes of investors. In this environment, a greater number of investors predict that profits will fall in the next 12 months than than they will rise. This is the first negative balance for these estimates in more than three years. More than 50% of respondents to the survey predict two interest rate hikes at most from the Federal Reserve in the next 12 months, compared with 40% one month earlier. Only 21% of investors are overweight on equities, compared with 42% in December, while a decline has been observed meanwhile in underweight positions on bonds. Pessimism about equities has reached never-before-seen levels, while Europe and Japan remain the preferred markets for investors. Average allocations to cash, however, have risen to 5.4%, their third-highest level since 2009, and 38% of investors are overweight in cash.
