Global fund managers overweight in equities

By Crystal Hsu  /  Staff reporter

Fri, Apr 26, 2013 - Page 14

Global fund managers continue to be overweight in equities this quarter on the back of strong corporate earnings and excess liquidity, although markets may see corrections in the near term, several foreign institutes said.

Global fund managers remain optimistic about the prospects for equities in the second quarter, as 57 percent hold an overweight view while none held an underweight view on the asset class, HSBC PLC’s quarterly survey of fund houses showed.

However, the number of optimists has dropped from 75 percent in the first quarter after noticeable advances on global bourses, the survey found.

“Emerging market equities, in particular, are back in the spotlight this quarter as over half of fund managers hold positive views, compared with 29 percent in the previous quarter,” HSBC Bank Taiwan head of wealth management Steve Chuang (莊懷德) said in a report.

DBS Bank voiced similar views, with overweight ratings particularly on US and Chinese equities that may receive further support from excess liquidity as Japan joins quantitative easing.

“The yield gap still overwhelmingly favors stocks after corporate earnings rose above their historical high,” DBS chief investment officer Lim Say Boon (林哲文) told a media briefing in Taipei yesterday.

While global bourses may see corrections in the short term, they may create wise entry opportunities, Lim said.

Lim stayed neutral on bond holdings.

However, the best times are over for gold, with the metal turning from a risk-hedge tool to a risk itself amid low inflationary pressures and receding economic uncertainty, DBS Bank said.

“Hedges work best when few people own it, but many people now own gold, making it ineffective as a hedge,” Lim said.