October’s market correction led to cash allocations falling sharply as investors decided to take advantage of buying cheaply as markets fell.
That was the conclusion of a fund manager survey commissioned by Bank of America Merrill Lynch, which also found that average cash balances among asset management firms dropped sharply to 4.7% in November from last month’s level of 5.1%.
In addition, the report found that:
• a net 44% of fund managers expect global growth to decelerate over the next 12 months: the worst outlook on the global economy since November 2008
• a net 54% expect a slowdown in Chinese growth in the next year, the most bearish outlook in over two years
• investors continue to have a negative outlook on corporates: a net 29% think global profits will deteriorate over the next 12 months (a 6-year low), and a net 47% think corporate margins will worsen in the next year (a 2-year low)
The survey of 516 fund managers was conducted between November 2-8.
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