Portfolio

Global equities are benefiting from an increasingly positive outlook by investors, according to the latest BoA Merrill Lynch Survey of Fund Managers.Just over half of fund managers, 55%, say they’re overweight in global equities, the largest proportion since July 2007. Just last month, only 40% of fund managers said they were overweight in international stocks. The additional assets appear to have come from bonds—54% of fund managers are now underweight in bonds, from 47% in December.

The Charles Schwab Corporation announced on Tuesday that fourth quarter revenues soared 14% year-over-year and December net new assets grew to more than $11 billion, the highest level in 23 months.

International fiscal stimuli and expectations of rising inflation tilt the balance in equities’ favor.

The issuance of U.S. Treasuries is set to fall by 16% this year, and tax receipts should jump. Demand for bonds will also increase, both among pensions and individuals and overseas buyers, and quality small cap stocks should rise above the pack. Keefe, Bruyette and Woods suggests shorting stocks that will benefit from rising short-term interest rates.

Client trading activity increased 17% from the third quarter due to stronger market conditions and an upbeat economic outlook.

A new study from Aon Hewitt claims that pension funds for companies located in the U.S., the U.K., Canada and Europe clocked out of 2010 with a 87% funded status, marking a 1% increase from previous numbers.

Mutual funds have emerged as the dominant source of selling pressure for state and local government paper in the new year as investors keep pulling out their money, forcing fund complexes to sell bonds into an already jittery market.

According to a company memo, “a big driver of [Morgan Stanley's] future success will be the continued build-out of our sales and trading platform and, in particular, our strategy and footprint in fixed income."

For equity funds, 2010 was a solid year, with the average fund rising 16.57% and 98% of all equity funds in positive territory, according to Lipper. Sector equity funds rose 19.02%, U.S. domestic equity funds rose 17.14%, world equity funds were up 13.67% and mixed asset funds delivered 12.02%.

According to Wealth-X, the top executives at the ten biggest banks and asset managers on Wall Street have an average net worth of $210 million. Their combined net worth is at least $2.1 billion. Check out the top ten.