Bringing you live news and features since 2006 

Renewed risk appetite spurs rush into emerging markets

RELATED TOPICS​

Investors are channeling most of their renewed risk appetite into global emerging market equities in the wake of an expected second wave of quantitative easing, according to the BofA Merrill Lynch survey of fund managers for October.



The level of risk that investors are taking in their portfolios rose more sharply than in any month since April 2009.

Hedge funds continued to add to their net equity exposure. The proportion of asset allocators overweight equities nearly tripled to a net 27 per cent from a net ten per cent in September, while they extended underweight positions in bonds.

The proportion of portfolio managers overweight cash fell to a net six per cent from a net 18 per cent.
 
The vast majority of this movement into equities was into global emerging markets. A net 49 per cent of asset allocators are overweight global emerging markets, a monthly rise of 17 percentage points.

Appetite for US, eurozone and Japanese equities remained stable while the panel became less bearish about the UK. 
 
Portfolio managers are more optimistic about China’s growth over the coming year. A net 19 per cent expects China’s economy to strengthen in the next 12 months, up from a net 11 per cent in September and 38 percentage points above August’s level.
 
“European stocks, especially in cyclical sectors, are riding on the coat tails of QE expectations with as yet no sign of a pick-up in underlying macro fundamentals,” says Gary Baker, head of European equities strategy at BofA Merrill Lynch Global Research.

As well as the dramatic moves into emerging markets, evidence of a broader pick up in risk appetite is apparent in October’s survey. Demand for commodity exposure recovered with a net 17 per cent of the panel overweight in October, compared with a net four per cent the previous month.

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Cryptocurrencies
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin (BTC) ended the week at approximately USD52,150, showing a notable...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by