Global fund managers have expressed a positive outlook on equities in the first quarter of 2013, with 75 per cent holding an overweight view and 25 per cent holding a neutral weighting in HSBC's latest fund manager survey.
The proportion of fund managers overweight on equities compares to the 40 per cent recorded in the fourth quarter of 2012 (Q4 2012). Over 60 per cent of respondents (compared to 30 per cent in Q4 2012) are underweight cash as an asset class, while over 30 per cent are underweight on bonds, the report found.
According to HSBC Bank Australia head of wealth management Mike Danby, the bearish sentiment on cash and bonds means fund managers are looking at stronger prospects in equities and selective fixed income markets, partly due to improving economic conditions in the United States and China.
Overweight views on North America grew from 60 per cent in Q4 2012 to 75 per cent for the coming quarter. Positive views on Asia-Pacific ex-Japan equities and Greater China equities also grew over the same period.
"Signs of recovery in the US and the bottoming out of China's economy are pointing to a potential upside in North American and Great China equities," Danby said.
High yield and emerging market bonds continue to be favoured by the majority of fund managers as investors continue to look for yield in a prolonged low-interest environment, HSBC stated.
In terms of fund flows, funds under management across 10 of the largest fund managers surveyed reached US$3.87 trillion at the end of the third quarter of 2012, up by 4.6 per cent from the previous quarter.
