The Dow Jones industrial averages plunge and subsequent sell-off that began last month has reduced global money managers appetite for risk, according to Merrill Lynchs March survey of fund managers. Merrill Lynchs Composite Indicator for Risk Appetite fell five points this month to 37, down from 42 in February, January and December. Portfolio managers have increased their cash balances to an average 4.4% from 3.8% in February, and 30% of the 199 global respondents said they are overweight in cash.
The survey also found that 45% think the Federal Reserve should be more concerned by the threat of slower economic growth, but only 17% say the Fed should be more worried by the threat of higher inflation.
Respondents are somewhat cautious about the prospects for economic growth and corporate profits, the survey found, although only 10% think a global recession is likely in the next 12 months, and 34% of portfolio managers think stock markets arent likely to be lower six months from now, up from 15% who said that in February.
The survey was conducted March 9-15.