Fund managers around the world maintained their positive outlook for the global economy as they continue to hold strong levels of equity shares compared to bonds, according to a poll conducted by Reuters.
Regional surveys found that 41 fund managers in the U.S., Japan and Europe support the notion that the U.S. economy is improving and will likely lead the rest of the world out of the woods. That sentiment has boosted stocks globally and chased buyers from the fixed-income markets. But the data revealed that managers expect current conditions to weaken over the long haul.
Japanese fund managers reportedly are in the process of raising their equity holdings to their highest level in eight years. The poll showed that the average Japanese portfolio would rise to a 57.3% weighting from 53.7% in August, marking the third consecutive monthly rise and the highest level since the surveys inception in 1995.
European skippers have also upped their stock holdings and reduced bond allocations. Meanwhile, U.S. managers have generally stuck to their positions, a trend that has helped buoy Wall Street and stymie U.S. Treasury issues. Some respondents to the U.S. poll said they plan to put cash to work in Asia in the coming months as the economy strengthens.
Still, a number of fund managers believe that over the next 12 months there could be a significant shift in sentiment. "There is a probability of some sort of correction in the equity market and a switch back into bonds over the next 12 months," Ken Adams, head of global strategy at Scottish Widows Investment Partnership, told Reuters.
For example, Euro zone managers plan to return to overweight bond positions in a years time but for the next three months they will remain overweight in stocks. British managers believe the stock market rally will fizzle eventually, forcing them to pare their equity holdings.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.