Fund managers are moving away from cash towards Australian and international equities, according to the Russell Investments quarterly investment manager outlook.

The survey found only 13 per cent of managers are bullish regarding the outlook for Australian cash during the fourth quarter, compared with 50 per cent in the second quarter.

Fifty four per cent of those surveyed were bullish regarding Australian equities in the fourth quarter, compared with 32 per cent in the second quarter, while international equities were viewed favourably, with 49 per cent of managers bullish compared to 30 per cent a year ago.

Those managers who viewed the market as undervalued rose to 56 per cent this quarter, an increase of 11 per cent from 2007.

More positively viewed sectors of the market include the health care sector, industrials, telecommunications, and information technology, while the Australian property sector is being viewed bullishly.

“The past 12 months have been characterised by a flight to safety away from equities and cash, however, the latest results show that this trend is slowly reversing. Managers are becoming more bullish and are slowly buying up assets they think are undervalued,” said the investment strategist at Russell Investments, Andrew Pease.