Fund managers increasingly bullish

Australian fund managers believe the worst of the global financial crisis is over and are now moving strongly back into equities, according to the latest Russell Investments Investment Manager Outlook.

The outlook, details of which were released today, revealed that almost all sectors had strengthened and that sentiment towards Australian equities was at its highest level since the manager survey began in 2005.

Commenting on the research, Russell Investments association portfolio manager Scott Bennett said Australian fund managers had breathed a sigh of relief in the last quarter and now clearly believed markets and the economy had finally turned the corner.

“Risk aversion has all but disappeared, with the majority of managers supporting the belief that Australia is more resilient than its larger counterparts,” he said.

Bennett said this view stemmed mainly from confidence in the Australian banking system and Australia’s considerable reliance on growth from China.

However, looked at on a sector-by-sector basis, the Russell research suggested that while manager support for international shares remained reasonably bullish, there was still some caution surrounding Australian real estate investment trusts.

The research also suggested that cash had increased in favour, with 22 per cent of managers bullish towards holding cash compared to 8 per cent in the previous quarter.