Swelling Optimism Amongst Fund Managers

Emerging markets are back in favour and fears over the US fiscal cliff are receding, according to a new survey by BofA Merrill Lynch 

Alanna Petroff 19 December, 2012 | 1:03PM

Fiscal cliff fears are receding and optimism is growing amongst investment managers, according to the latest BofA Merrill Lynch Fund Manager Survey.

The December survey shows that a large number of respondents are expecting the global economy to strengthen in 2013.

A large number of respondents are expecting the global economy to strengthen in 2013

“A net 40% of investors believe the global economy will strengthen in the year ahead, a rise of six percentage points month-on-month and double the reading two months ago,” stated the BofA Merrill Lynch Global Research report, which compiled results from the survey of investment managers.

Meanwhile, managers are slowly becoming less worried about the US fiscal cliff, even though it still remains the top overall investment concern for fund managers.

Emerging Markets are Back in Favour

Emerging markets are also garnering more attention from fund managers, and optimism over China’s economy has hit a record high.

“A net 67% of the regional survey respondents say China’s economy will strengthen in the coming year, up from a net 51% in October,” stated the report.

“The bulls are back in China, while policymakers elsewhere [around the world] put bears onto the back foot. If the bulls are to claim a decisive victory, we need hard evidence that the economy is reaccelerating,” stated Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

The money manager survey by BofA Merrill Lynch compiled responses from 255 institutional investors who manage nearly $670 billion in combined assets. The survey was conducted between December 7 to 13, 2012.

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About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.