Due to decreased fears about recession and inflation, mutual fund managers' expectations for strong performance by emerging markets stocks has risen, The Wall Street Journal reports, citing the monthly Merrill Lynch fund managers survey.

Only 7% of fund managers in September said they believe a global recession is possible, down from 12% in August, and only 3% think inflation will rise a year from now, down from 50% three months ago. Those who would remain underweight in emerging markets stocks fell to 12%, down from 16% in August.

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