Fund manager confidence in Europe equities rises

European_parliamentConfidence among European and global fund managers is increasing, with many seeing European equities as undervalued as the macro landscape improves. Emerging market equities were also seen as undervalued while US equities were considered overvalued. Allocations to bonds were at an historical low and equity allocations, including Eurozone stocks, increased. However, slightly lower cash allocations remained relatively high. The Bank of America/Merrill Lynch (BoAML) fund manager survey, which the bank produces each month, showed that:
  • 81% of fund managers globally viewed US equities as “by far the most overvalued”
  • 23% believed European equities were undervalued
  • 44% said global emerging market equities were undervalued
  • UK equities, with a 30% underweight, are now the most underweighted region globally for one year
Allocation to Eurozone equities increased to a net 27% overweight, up from 23% since the last survey. Nearly 70% of European fund managers expected positive economic growth on a 12-month horizon, though BoAML warned that there could be complacency over the French elections. The bank said fund managers’ views on the election were “more sanguine” than the bank’s view. Should Marine Le Pen win, “just” 27% of fund managers predicted a greater than 10% fall in the Eurostoxx. Though confidence is said to be rising, the slightly lower level of cash allocations among European fund managers was still in line with the ten-year average, and above it for fund managers globally. There were 165 participants in the global survey. ©2017 funds europe

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

INTERVIEW: Finding managers that can (and do)

Apr 18, 2017

Fabrice Kremer, a fund selector at Banque de Luxembourg Investments, has berated fundamental managers for failing to beat indices, but he remains committed to active funds. He speaks to Nick...

JERSEY INTERVIEW: ‘A steady sort of place’

Mar 21, 2017

The chief executive of Jersey Finance is keen to portray the island as a stable, trustworthy jurisdiction. He talks to George Mitton.

Roundtables

ROUNDTABLE: The issue is perception

Mar 21, 2017

Our panel discuss tax transparency, the elegance of private placement and why Jersey could do more to promote itself. Chaired by Tom Cowsill in Saint Helier.

ASSET SERVICING ROUNDTABLE: Under pressure

Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.