A net 66 percent of respondents expect the global economy to strengthen over the next year. This bullish reading is unchanged from last month\u2019s survey. However, concern at the pace of expansion is rising. A net 78 percent now anticipate below-trend growth over the next 12 months. In response, more investors than ever before (63 percent) are calling on companies to increase their capital spending. <\/p>\n
Equities are in greater favor than at any time since the start of the year. A net 48 percent of asset allocators report overweights, up 11 percentage points month-on-month, even though a net 15 percent now regard the asset class as over-valued \u2013 this measure\u2019s strongest response since 2000. Appetite for real estate has also risen. The net 6 percent overweight reported ranks as the highest in eight years. <\/p>\n
In contrast, underweight positions in bonds (now regarded as over-valued by a net 75 percent) have reached their highest level since the end of 2013. <\/p>\n
The prospect of debt defaults in China has strengthened as the most significant risk on investors\u2019 horizon. It is now cited by 36 percent of respondents. 20 percent worry most over potential \u2018asset mania\u2019 \u2013 a new category introduced in the survey this month. <\/p>\n
Even so, investors have reduced their cash buffers. Although still somewhat high, average holdings of 4.5 percent are at their lowest since January. <\/p>\n
\u201cAlthough fund inflows and oil prices argue for near-term consolidation, the case for a summer \u2018melt-up\u2019 remains stronger than for a meltdown as high liquidity and low growth force investor cash levels down,\u201d <\/em> said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research. <\/p>\n \u201cEurope has been a cheap way to get equity exposure, but investors no longer see Europe as cheap. This together with some uncertainty on the level of growth may be why optimism is starting to wane,\u201d said Obe Ejikeme, European equity and quantitative strategist. <\/p>\n European QE postponed<\/strong><\/p>\n Investors no longer see quantitative easing by the European Central Bank as imminent. 42 percent of respondents anticipate any ECB program coming in Q4 or even 2015, up from 19 percent last month. A further 22 percent expect no action. However, current allocations suggest global investors are not yet ready to give up on the region. Net overweights have risen for the second consecutive month, to a net 43 percent. <\/p>\n Elsewhere, regional fund managers are already showing signs of caution. A net 6 percent of now regard European equities as over-valued \u2013 the highest proportion since 2000. As recently as April a net 16 percent viewed the market as under-valued. <\/p>\n Japan picks up<\/strong> <\/p>\n Japanese equities have declined 7 percent this year, underperforming other global markets. The survey shows global investors treating this as a buying opportunity. A net 21 percent are now overweight, up from a net 7 percent in May. <\/p>\n Moreover, a net 10 percent favor overweighting Japan in preference to all other equity markets in the next year. <\/p>\n These changes come as regional fund managers turn significantly more positive on Japan\u2019s outlook than recently. A net 73 percent expect the country\u2019s economy to strengthen over the next 12 months. This represents a 20 percentage point rise in the space of two months. <\/p>\n Dollar dominates<\/strong><\/p>\n Bullishness on the U.S. dollar has re-emerged strongly. A net 79 percent of respondents now expect the currency to appreciate over the next year. This stands out as one of the strongest readings on this measure in the past 15 years. <\/p>\n In contrast, a net 28 and 48 percent expect the Euro and Japanese yen, respectively, to weaken over the same period. The European currency\u2019s reading has declined seven percentage points month-on-month. This appears to reflect a combination of the ECB\u2019s dovish stance and some weaker European macro data.<\/p>\n Fund Manager Survey<\/strong><\/p>\n An overall total of 223 panelists with US$581 billion of assets under management participated in the survey from 6 June to 12 June 2014. A total of 167 managers, managing US$422 billion, participated in the global survey. A total of 120 managers, managing US$270 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Global Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world.<\/p>\n","protected":false},"excerpt":{"rendered":" Global investors have regained appetite for risk against the backdrop of strong liquidity and a fairly positive economic outlook, according to the BofA Merrill Lynch Fund Manager Survey for June.<\/p>\n","protected":false},"author":20,"featured_media":35387,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1481],"tags":[1809,1655,1659,1657,1651,1437,1724,1999,2091],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/35389"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=35389"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/35389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/35387"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=35389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=35389"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=35389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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Against this background, longer-term conviction towards European equities has started to decline. A net 21 percent now see Europe as the equity market they are most likely to overweight over the next year, down seven percentage points month-on-month. <\/p>\n