Fund managers optimistic about greater China equities

Fund managers have become more optimistic about greater China equities, with 67 per cent taking an overweight view, according to HSBC’s quarterly fund manager survey.

The survey showed that in the first quarter of 2009, the number of fund managers taking an overweight view climbed from 50 per cent in the last quarter of 2008 to 67 per cent, while none held an underweight view in contrast to the previous quarter's 38 per cent and 33 per cent were neutral, up from 13 per cent.

“Fund managers are most optimistic about greater China equities because they expect the stimulus policies of the Chinese Government to support domestic demand and economic growth. This may also be linked to the potential positive impact of the US stimulus and recovery measures on China’s economy,” HSBC Australia head of funds and investments Charles Genocchio said.

Bonds were preferred over equities, with almost six in 10 fund managers surveyed holding an overweight view, while 43 per cent held a neutral view compared to 30 per cent last quarter. None held an underweight view.

“Flight to quality continues to be a central theme for fund managers as they tend to veer towards more conservative asset classes given continued market volatility and the global economic uncertainty. We expect this sentiment to remain in the medium term,” Genocchio said.