Money managers just about going all in on stocks: Survey

Money managers just about going all in on stocks: Survey
Confidence hits highest level in a decade, Merrill study reveals; 67% now overweighting equities
FEB 09, 2011
Money managers are more bullish on global stocks this month than at any time in the past decade, according to a BofA Merrill Lynch Global Research survey. A net 67 percent of respondents, who together manage $569 billion, had an “overweight” position on global equities, the highest level since the survey first asked the question in April 2001. That compares with 55 percent in January and 40 percent in December. Meanwhile, a net 9 percent is “underweight” cash, the lowest allocation since January 2002. The February survey “is one of the most bullish in years,” Gary Baker and Michael Hartnett, equity strategists at BofA Merrill Lynch, wrote in a report today. “Surging inflation expectations show we are no longer in a Goldilocks environment and a meaningful tactical correction in risk assets could be caused by a jump in interest rates or weaker U.S. growth.” A net 34 percent of survey respondents are now “overweight” U.S. equities, up from 27 percent in January. Appetite for euro-area stocks has also risen, to net 11 percent “overweight” from 9 percent “underweight” in January. Meanwhile, February saw the biggest decline in emerging-market exposure in the survey's history, with net 5 percent of managers now “overweight” global emerging-markets equities, down from January's 43 percent. “Unusually, higher risk appetite has been accompanied by a dramatic downsizing in asset allocation to emerging markets, as surging global growth expectations have increased the value attractions of developed-market alternatives,” London-based Baker, head of European equities strategy at BofA Merrill Lynch, said in a statement. The survey was conducted between Feb. 4 and Feb. 10.

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