Fund managers most negative on equities in 10 years

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

In its July poll of 191 global fund managers, the investment bank also found investors' love affair with emerging markets to be souring and their demand for safe-haven cash at highs.

But the poll also showed that concern about inflation has waned, suggesting that investors are expecting a slowing global economy to squelch the threat of price rises.

"This very much is the age of extremes," said David Bowers, Merrill's poll consultant.

The survey showed 58 percent of fund managers underweight equities in July versus 50 percent in June and just 35 percent in May.

Most significantly, this was the most underweight the fund managers have been versus those who are overweight in the roughly 10 years of the survey, including the post Internet bubble period.

Cash holdings were the inverse, with a record 60 percent overweight versus 51 percent in June and 42 percent in May.

Reuters latest asset allocation polls of leading investment houses, issued at the end of June, produced a similar finding.

MSCI's main world stock market has lost more than 9 percent since the June Merrill poll, battered by worries about a slowing economy, rising oil prices and renewed fears for the stability of the financial system.

Bowers said the new poll showed a sharp shift in fund manager attitudes towards emerging markets equities, until recently the darlings of the investment community.

• 1
• 2