Investors bought more shares in December and reduced cash holdings on expectations that the United States Federal Reserve (Fed) the contractionary monetary policy cycle has ended and the World economy avoid a big recession.
The survey of fund managers BofA showed that they are more overweight in equities than cash since January 2022. The survey was conducted among 219 participants with $611 billion in assets under management.
They are still overweight cash, but at their smallest since April 2021, while this is their largest overweight in equities since February 2022.
A rebound in world markets equities and government debt gained momentum last week after dovish comments from the head of the Fed, Jerome Powellfueled expectations of interest rate cuts in 2024.
Wall Street continued to rack up seven consecutive weeks of gains, the benchmark’s longest weekly bullish streak S&P 500 since 2017.
And in fixed income markets, government bond yields have fallen further, with 10-year yields in the United States and Germany down 40 basis points each this month, Reuters recalled.
Fund managers have been more optimistic since January 2022, especially towards public debt, according to the BofA survey. 45% of respondents said bonds were the best performing asset class in 2024.
What worries major global investors?
In terms of risks facing the global economy, a recession or hard landing tops the list of investors’ concerns, followed by a inflation high that keeps central banks in a hawkish position and a deterioration of the geopolitics.
73% of those surveyed stated that the and in Japanese is underrated. The yen has weakened 10% against the dollar this year, but is expected to rebound as the Bank of Japan move away from ultra-loose monetary policy.
However, this change is not imminent. On Tuesday, the Bank of Japan maintained its monetary policy and did not signal a short-term end to it.
Source: Ambito
