Investors stick with stocks; prefer Europe-BofA

LONDON, Aug 17 (BestGrowthStock) – Investors broadly maintained
their overweight equity holdings in August while their cash
positions fell as global economic worries eased, a survey from
BofA Merrill Lynch showed on Tuesday.

The monthly fund managers poll also showed investors became
overweight on European stocks for the first time since November
while their U.S. positions fell to the lowest since early 2008.

According to the poll, investors’ net equity overweight
position stood at 12 this month, compared with 11 percent in
July. This means the difference between overweights and
underweights is 12 percentage points.

The survey, which polled 187 fund managers who manage assets
totalling $513 billion, showed their average cash position fell
to 3.8 percent this month from 4.4 percent last month.

Their cash overweight position fell further to 7 percent
from 13 percent in July. Bonds underweight rose to 23 percent
from 15 percent last month.

“We call it a cautious and careful consensus. Bearishness we
saw in June and July has softened but the near-term outlook
remains neutral,” said Patrick Schowitz, European equity
strategist at BofA Merrill Lynch.

Fund managers turned overweight on euro zone equities with a
net 11 percent overweight. They became net 14 percent
underweight on the United States, the lowest level since January
2008.

They have turned almost neutral on the UK with a net 2
percent underweight, which is the most positive reading since
May 2007.

“The U.S. has become the focus of global growth worries.
Investors have realised Europe is less bad,” Schowitz said.

Risk appetite among hedge funds also improved. Their net
exposure to equity markets — measured as long minus short as a
percentage of capital — rose to 22 percent from 18 percent,
which was the lowest level since March 2009.

The ratio of gross assets held by hedge funds relative to
their capital stood at 1.16, compared with 1.15, indicating that
their leverage level remained steady.

Global emerging markets remained the most preferred region
with a net 38 percent overweight, although they were off extreme
overweight levels of 53 percent seen last November.

A net 62 percent of investors view the yen as overvalued,
which is the highest reading on record.

(Reporting by Natsuko Waki; editing by Stephen Nisbet)

Investors stick with stocks; prefer Europe-BofA