Moneycontrol
Last Updated : Jul 21, 2016 05:35 PM IST | Source: Moneycontrol.com

Global fund managers' cash at highest levels since 2001: Survey

Cash levels at funds run by investment managers globally are at the highest levels since November 2001, since when data has been tracked, a report by Bank of America-Merrill Lynch says.


Moneycontrol Bureau

Cash levels at funds run by investment managers globally are at the highest levels since November 2001, since when data has been tracked, a report by Bank of America-Merrill Lynch says.


Curiously, they have still continued to increase exposure to risk assets, having upped exposures to emerging market equities and industrial stocks to the highest in two years.


This has perhaps been predicated on an increased expectation that central banks will follow up with even looser monetary policy to stave off a perception that a global growth slowdown is under way, data from the report suggests.

A total of 195 panellists managing assets of USD 537 billion participated in the survey.


Shares of several equity markets globally have raced to multi-year or all-time highs soon after a momentous Brexit verdict shook sentiment in late June.


That verdict nudged fund managers to be cautious on the pound, euro, UK and European shares on the whole, with below-average exposures seen globally. They are also underweight on global banks.


But as many as 39 percent managers (up from 27 percent last month) think at least one major global central bank will adopt the policy of 'helicopter money', a term coined during the Great Depression to literally mean they will throw money from helicopters to stimulate the economy, but now translated to more easy-money policies such as low interest rates and bond-buying.


Also, strangely, a record number of fund number of investors have bought till risk hedges to protect them from a downturn in equities, more than they did even in 2008.

So if they are so pessimistic on the fundamental prospects of the global economy, perhaps the only factor that is driving equities is the gush of liquidity and the expectations it will continue.

First Published on Jul 21, 2016 01:00 pm
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