Fund Managers Bearish To Bullish In One Month!

The consensus has shifted from apocalyptically bearish to reluctantly bullish.

Michael Hartnett, Co-Head, International Investment Strategy, Banc of America-Merrill Lynch

This morning, Merrill Lynch released their monthly survey of fund managers which took place between April 2 and April 8.  Here are some highlights:

  • Optimism about global growth reached its highest level since early 2004 with a net 26% of respondents believing the global economy will strengthen in the next 12 months, up sharply from -24% in January.
  • Just 17% of respondents are underweighting equities compared to 41% in March.
  • A net 26% of respondents believe the Chinese economy will strengthen over the next 12 months.  As recently as November, 85% expected it to decline.
  • As a result, 26% of respondents are overweight emerging markets compared to just 4% in March.
  • Along the same lines, a net 4% of respondents are overweight commodities – the first positive reading since last August.
  • Technology has become popular, with 27% of respondents overweight the sector.

My, my how things have changed.  Things looked diametrically opposite to fund managers six months ago.

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