Market Outlook: Global fund managers still rely on equities and are keeping the maximum share of the asset class in equities.
Market Outlook: Global fund managers still rely on equities and are keeping the maximum share of the asset class in equities. This has been disclosed in the Global Fund Managers Survey of Bank of America (BofA). This monthly BofA survey, which included 329 CIOs, portfolio managers and equity strategists, found that investors across the world are viewing global inflation as temporary.
Despite the US Federal Reserve hinting at tightening its policies ahead of projections, fund managers are keeping a higher share of equities in their portfolios. However, their confidence has now shifted more towards banks and commodities and the allocation of technology stocks is at the lowest level since December 2008.
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Fund managers are bullish on the stock
According to a BofA survey, about 55 per cent of fund managers are keeping equities overweight. At the geographical level, that is, regionally, about 35 percent are overweight on Eurozone equities and 5 percent on US stocks. They have low confidence in developing countries and British stocks, ie underweight positions. Talking about sector-wise, the share of banking stocks was 21 percent last month, which has now increased to 41 percent i.e. doubled. Apart from this, the share of commodities shares also reached a record level of 31 percent, with a jump of 12 percent compared to the previous month. Interestingly, the survey revealed that investors are now losing confidence in technology stocks as interest rate hikes by the US Fed have worried them.
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Biggest risk in rate hike
For the past few months, global fund managers were viewing inflation as a major threat, but now treating it as a temporary one. 56 per cent of the investment professionals surveyed believe that it is temporary, while 36 per cent consider it to be temporary. Investors now believe that rate hike by central banks is the biggest risk, most fund managers surveyed by BofA believe that the US Fed will come forward to deal with inflation and increase interest rates by mid-April this year. Can do. Investors are predicting that by the end of this year, there may be a hike in rates three times.
(Article: Kshitij Bhargava)
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