15/12/2010
Investors turn to US equities
A rise in investor optimism is working to the advantage of US equities, according to the most recent BofA Merrill Lynch survey, undertaken between 3 and 9 December, which interviewed 209 managers with USD569bn in assets.A net total of 44% of respondents to the survey predict that the global economy will improve in 2011, compared with 35% one month earlier. 51% expect corporate profits to rise next year, compared with 36% in November. Meanwhile, 61% of investors expect inflation to slip in 2011.As Europe is still dragged down by government debt trouble, investors are turning to US equities, with 16% overweight in this asset class, compared with only 1% in November. However, 4% of respondents are overweight in Euro zone equities, while 15% of respondents were overweight in November. There has also been a strong increase in investors who are predicting that the US dollar will rise: 36% say that the US currency will get stronger, compared with only 14% in November.Despite a rebound in confidence in global growth outlooks, the survey finds that Europe has lost the support of investors due to political hesitations and banking trouble, while in the United States, tax policy agreements and the new wave of quantitative easing (QE2) have brought US businesses back to the fore.European investors are, however, keeping their wits about them. 26% of them predict that conjuncture will improve in 2011, compared with 23% in November, while 34% predict an increase in profits per share, compared with 29% one month earlier.
