BofA Merrill Lynch Fund Manager Survey Finds Weakening Outlook for Global Economy Amid Fears Over China
18 August 2015 - 10:30PM
Business Wire
Record Low Sentiment Towards Emerging Markets
and Energy Sector
Global investors have shifted their attention from Greece to
China amid continued concern of a Chinese recession, according to
the BofA Merrill Lynch Fund Manager Survey for August. Respondents
are scaling back their expectations for economic growth.
- China recession is now rated the number
one “tail risk” by 52 percent of panel.
- Fifty-three percent of investors say
the global economy will strengthen in coming year, down from 61
percent in July.
- The survey reports the lowest
allocations to emerging markets equities since April 2001 and to
the Energy sector since February 2002.
- More investors say Global Emerging
Markets is the region they most want to underweight; Europe is the
region they most want to overweight.
- The survey notes a rising consensus
that the Fed will raise rates in third quarter; the majority of
panel now expects the yield curve to flatten in next 12
months.
- An anti-commodities stance is evident
with moves out of Energy and Materials, while defensive weightings
increase.
“Investors are sending a clear message that they are positioned
for lower growth in China and emerging markets,” said Michael
Hartnett, chief investment strategist at BofA Merrill Lynch Global
Research.
“European stocks remain in favour – but investors like
domestically focused names and are avoiding anything exposed to
China or commodities,” said James Barty, head of European equity
strategy.
Fund Manager SurveyAn overall total of 202 panelists with US$574
billion of assets under management participated in the survey from
7 August to 13 August 2015. A total of 162 managers, managing
US$449 billion, participated in the global survey. A total of 100
managers, managing US$224 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.
BofA Merrill Lynch Global ResearchThe BofA Merrill Lynch Global
Research franchise covers almost 3,400 stocks and 1,200 credits
globally and ranks in the top tier in many external surveys. Most
recently, the group was named Top Global Research Firm of 2014 by
Institutional Investor magazine; No. 1 in the 2015 Institutional
Investor Latin America survey; No. 1 in the Institutional Investor
2015 Emerging EMEA Survey; No. 2 in the 2015 Institutional Investor
All-Asia survey; and No. 2 in the 2015 All-America Fixed Income
survey for the fourth consecutive year. The group was also named
No. 2 in the 2014 Institutional Investor All-America survey and No.
2 in the 2014 All-China survey.
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