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Globe and money

Global fund managers bullish on equities in Q1 2013

Seventy five per cent of global fund managers in HSBC’s latest fund managers’ survey are holding an overweight view towards equities in the first quarter of 2013, up from 40 per cent in quarter four 2012.

A quarter maintains a neutral outlook, versus 50 per cent in 4Q12. No fund manager is underweight on equities.

Over six in 10 fund managers (vs 30 per cent in 4Q12) are underweight on cash as an asset class, while over a third (vs 20 per cent in 4Q12) are underweight on bonds. No fund manager holds a positive outlook on bonds or cash for 1Q13.

Vineet Vohra, HSBC’s regional head of wealth development, Asia Pacific, says: “The bearish sentiment of global fund managers towards cash this quarter underlines potential opportunities in the market. They are looking at stronger prospects in equities and selective fixed income markets, based on valuation and on the back of improving economic indicators in the US and China.”

Seventy five per cent of fund managers held overweight views on North American equities in 1Q13 given the relatively resilient US economy, up from 60 per cent in 4Q12. More fund managers are holding a positive outlook towards Asia-Pacific ex-Japan equities (43 per cent in 1Q13 vs 33 per cent in 4Q12) and Greater China equities (50 per cent in 1Q13 vs 43 per cent in 4Q12).

Vohra says: “The survey also highlights regions that continue to offer strong growth opportunities in the new year. Signs of economic recovery in the US and the bottoming out of China’s economy are pointing to potential upside in North American and Greater China equities.”

In terms of bonds, high yield and emerging market bonds continue to be favoured by the majority of respondents as investors continue to look for yield in a prolonged low-interest environment.

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