Institutional investors are losing faith in the global recovery, according to Merrill Lynchs Fund Manager Survey for August, with only 43% of respondents expecting the global economy to strengthen over the next year. In July, 79% of investors expected the economy to strengthen. However, 34% of those polled think that the global equity markets are undervalued, with 25% thinking that equities are currently undervalued by at least 15%.
Although fund managers perceptions of the U.S. economy remain negative, 29% said that U.S. equities have the worst outlook, vs. 36% last month. Fewer investors said they were most likely to underweight the U.S. stock market: 43% in August vs. 57% in July.
The opinions come from an Aug. 1-8 survey of 292 institutional investors with worldwide assets totaling more than $706 billion.