Fund managers maintain ‘uber bearish’ outlook


Global economic sentiment among fund managers has plunged to new lows, with cash holdings at a record high amid stagflation expectations.
According to Bank of America’s (BofA) latest global Fund Manager Survey, 77% of respondents were anticipating a global recession — the highest recording since the height of the COVID-19 pandemic in April 2020.
The survey — which gauged the sentiments of 309 panellists from 4 to 10 November —also reported 92% of investors were expecting the downturn to be characterised by ‘stagflation’ (high inflation combined with deteriorating labour market conditions and subdued market demand).
Given the “uber bearish” outlook, global fund managers were holding cash levels at 6.2%, up from 6.1 per cent in September (the highest recording since 9/11).
Profit expectations also remained low, with 77% of surveyed investors expecting a deterioration — albeit an improvement on the previous month (83%).
A bearish outlook on economic conditions and profitability had influenced chief investment officers (CIOs) to preference balance sheet repair (55%) over capital spending (21%) and buy
backs (17%).
When asked for their outlook on interest rates, respondents said they were expecting the US funds rate to peak at 5% per cent in the second quarter of 2023.
However, this preceded the release of the latest US Bureau of Labor Statistics, which sparked optimism of a slowdown in hikes by the Federal Reserve.
The bureau reported core inflation of 0.3% in October, down from a 0.6% rise in September.
As a result, year-on-year inflation fell below market expectations (7.9%) to 7.7%, down from 8.2% in September — the lowest annual inflation figure since January 2022.
Recommended for you
The $673 billion global investment manager has appointed a former Zenith sales head as it seeks to expand its reach in the Australian wealth management market.
Fund managers may be operating in a squeezed environment, but a salary guide shows they are willing to pay up for specialist talent to diversify their fund range.
Reach Alternative Investments has entered into a strategic partnership with Russell Investments to bolster its wholesale private markets offering for financial advisers and investors.
Boutique investment consulting and research house Genium Investment Partners has announced a senior appointment to drive further growth in its research ratings business.