Fund managers are basically optimistic about 2003, with hopes that the recent interest rate cuts from the Fed and the European Central Bank will lead to increased growth, according to the Merrill Lynch Fund Manager Survey for December. Institutional investors are now comfortable that monetary policy is "about right,” according to the survey.
Sixty-seven percent of managers surveyed think economic growth will strengthen over the next 12 months, up from 42% in November and 37% in October. The panel still considers equities to be undervalued, with one-third saying world stock markets are undervalued by 10% or more.
Investor sentiment has also improved, with 74% of managers saying they believe the stock market will be higher a year from now, up from 66% last month. And 51% now think it is unlikely that bonds will do better than stocks in 2003. The U.S. stock market is now first, along with global emerging markets, as the region that managers would most like to overweight next year.
