Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

6394

Renewed risk appetite spurs rush into emerging markets

RELATED TOPICS​

Investors are channeling most of their renewed risk appetite into global emerging market equities in the wake of an expected second wave of quantitative easing, according to the BofA Merrill Lynch survey of fund managers for October.



The level of risk that investors are taking in their portfolios rose more sharply than in any month since April 2009.

Hedge funds continued to add to their net equity exposure. The proportion of asset allocators overweight equities nearly tripled to a net 27 per cent from a net ten per cent in September, while they extended underweight positions in bonds.

The proportion of portfolio managers overweight cash fell to a net six per cent from a net 18 per cent.
 
The vast majority of this movement into equities was into global emerging markets. A net 49 per cent of asset allocators are overweight global emerging markets, a monthly rise of 17 percentage points.

Appetite for US, eurozone and Japanese equities remained stable while the panel became less bearish about the UK. 
 
Portfolio managers are more optimistic about China’s growth over the coming year. A net 19 per cent expects China’s economy to strengthen in the next 12 months, up from a net 11 per cent in September and 38 percentage points above August’s level.
 
“European stocks, especially in cyclical sectors, are riding on the coat tails of QE expectations with as yet no sign of a pick-up in underlying macro fundamentals,” says Gary Baker, head of European equities strategy at BofA Merrill Lynch Global Research.

As well as the dramatic moves into emerging markets, evidence of a broader pick up in risk appetite is apparent in October’s survey. Demand for commodity exposure recovered with a net 17 per cent of the panel overweight in October, compared with a net four per cent the previous month.

Latest News

Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15..
New analysis by London-based Nickel Digital Asset Management reveals 38 listed companies with a combined..
Bloomberg has announced that for the first time, its proprietary Bloomberg Second Measure (BSM) transaction..

Related Articles

Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by