Investor sentiment rises sharply, finds BofA-ML survey

Our Bureau Mumbai | Updated on March 12, 2018 Published on August 14, 2012

Investor sentiment appears to have risen sharply from July lows with fund managers increasing allocations to equities, real estate and commodities, according to Bank of America-Merrill Lynch fund manager August survey.

Global fund managers made massive month-over-month revisions to their growth outlooks (the biggest jump since April 2009) and expect global growth to improve over the next 12 months.

Most fund managers have said the world economy will get stronger in the coming 12 months.

Not a big change

A total of 232 panellists with $640 billion of assets under management participated in a BofA-ML survey.

It has found not just resurgence in investor sentiment, even fears about the outlook for corporate profits seem to have reduced.

A net 21 per cent of the panel expects profits to deteriorate in the coming year, down from 38 per cent a month ago. The fresh optimism comes amid growing expectations of intervention by the European Central Bank (ECB).

“Investor positioning does not indicate a major inflection point in the investment cycle. Bond allocations remain high and investors are shunning the most cyclical equity sectors,” noted Michael Hartnett, Chief Global Equity Strategist of ECB.

Investors appear to have put money to work in a range of asset classes as their appetite for risk has picked up, albeit modestly.

Allocations to real estate have moved into overweight territory for only the second time since 2007 and have reached their highest level since January 2007.

Investors are putting greater pressure on corporates to return cash to shareholders. A net 43 of the panel said that share buybacks and dividends was the most important use of cash flow, ahead of capital spending and strengthening balance sheets.

Published on August 14, 2012
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