Fund managers are restoring their faith in equity markets, moving investments to the U.S. and Japan from Europe, according to a March survey by BofA Merrill Lynch.
Forty-six percent of the 207 U.S. and international fund managers surveyed were overweight equities this month, up from 33% in February.
Fund managers were 19% overweight U.S. equities and 6% overweight Japanese equities. In February, they were 1% overweight U.S. equities and 10% underweight Japanese equities. Fund managers are 21% underweight European equities in March. In February, they were 2% overweight the asset class.
A net 40% of fund managers said the corporate profit outlook in the eurozone was the worst of all regions.
“Investors' concerns about Greece are easing, but European country risk remains a key constraint to optimism over economic recovery,” Gary Baker, head of European equities strategy at BofA Merrill Lynch Research, said in a news release.
Fewer European and U.S. managers were optimistic about economic growth in their regions this month. Forty-five percent of European fund managers predicted economic growth in the eurozone over the next 12 months, down from 72% in January. Similarly, 43% of U.S. fund managers predicted growth in the U.S. economy over the next 12 months, down from 76% in January.
Concerns over inflation dropped further in March, with 34% expecting it to increase in the next year, down from 46% in February and 61% in January.
The survey was conducted March 5-11.