Fund managers want corporations to increase shareholder payouts via share buybacks, dividends or cash acquisitions, according to Merrill Lynch's latest global fund manager survey. The proportion of surveyed investors that want cash returned to shareholders has reached a record high of 53%, up from 44% in December. Of the 223 funds surveyed Jan. 5-11, 37% believe that corporate payouts are too low, compared with 31% in December.
"Many money managers appear to support companies issuing debt to buy back stock, and thereby boosting their return on equity in the process," the report said. "It remains to be seen just how sustainable this unique dynamic is. But for now, it seems set to dominate the agenda until companies experience a significant shock to cash flows."