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August survey shows rosier money managers’ outlook


Money managers have renewed optimism that the global economy will improve in the coming 12 months, according to the Bank of America Merrill Lynch August Survey of Fund Managers.

A net 15% said the global economy will get stronger in the next year, compared with a net 13% last month who thought the economy would weaken; that is the largest confidence jump since April to May 2009. Confidence in China is improving as well, with a net 14% saying its economy will improve in the next year, the highest percentage since November 2010.

Fewer managers expect corporate profits to fall, with a net 21% this month expecting such a decline, down from a net 38% last month.

Investors are also putting pressure on companies to return cash to shareholders. A net 43% said share buybacks and dividends are the most important use of cash flow, the highest level since November 2010.

Asset allocation has increased to real estate and equities; a net 5% are overweight real estate, the highest level since January 2007. A net 12% are overweight equities compared to a net 3% underweight last month. A net 3% said trading conditions are “good,” compared to a net 3% that said conditions were “poor” last month.

A total of 232 money managers with $640 billion in assets under management participated in the survey Aug. 3-9.