Global fund managers seem to have recovered an appetite for risky assets this quarter, as more than 50 percent overweight Greater China equities and an increased number reduce cash positions, a survey by HSBC PLC showed yesterday.
As equity markets rebound, fund managers are less bearish in equities, with 50 percent and 30 percent holding neutral and overweight views respectively, the survey found.
The figures signal a significant improvement in sentiment since only 20 percent of the fund respondents were neutral about equity holdings last quarter, while 30 percent planned to increase positions, the survey showed.
More than 10 percent of fund managers shifted from neutral to overweight views toward Greater China equities, one of the worst- performing asset classes last year, the survey said.
The MSCI China and Hang Seng indices slumped 18.2 percent and 17.3 percent respectively last year, bucking a 2.1 percent gain for the Standard & Poor’s 500 in the US and lower than a 10.5 percent drop in the MSCI Europe, the survey said.
“With an attractive valuation, Greater China equities may offer potential wealth opportunities,” HSBC head of wealth development Malik Sarwar said in the report.
China’s monetary easing measures such as cutting the reserve requirement ratio also helped improve market sentiment, Sarwar said.
Investors expect further easing, which will continue to shore up the Chinese equities market, he said.
Only 20 percent of fund managers hold an underweight view this quarter, a steep decline from the 50 percent in the previous quarter, the survey said.
Apart from Greater China equities, an increasing number of fund managers favor emerging-market equities at 55 percent and Asia Pacific ex-Japan equities at 40 percent this quarter, the survey said. That compared with 27 percent and 20 percent respectively from three months earlier, the poll showed.
A majority of respondents are bullish on Asian bonds, global emerging markets and high-yield bonds, as many companies have solid fundamentals and are supported by relatively strong economies, the survey said.
A total of 44 percent of fund managers are underweight toward cash this quarter, compared with 22 percent last quarter.
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