Global money managers cut their holdings of U.S. equities this month amid concern that the world's largest economy may be weakening, a Bank of America Merrill Lynch Global Research survey showed.
A net 14% of survey respondents, who together manage about $513 billion, were underweight U.S. equities, up eight percentage points from July, and 27% were underweight Japanese equities, up 20 percentage points over the same time period.
Also, a net 19% expected the Chinese economy to weaken over the next year, down 20 percentage points from July.
“Clearly the U.S. has become the focus point of global growth worries,” Patrik Schowitz, a European equity strategist at BofA Merrill Lynch, said at news briefing in London on Tuesday. “Instead, emerging markets have become the default long-term growth story.”
A net 73% in the August survey expect below-trend growth, mirroring July's response. Also, a net 78% said a double-dip recession is unlikely.
A net 11% were overweight eurozone equities in August, compared to 10% underweight the asset class in July.
Only 1% anticipate lower inflation in 12 months, down from 12% in July. A net 55% do not expect a U.S. interest rate hike before the third quarter of 2011.
Reporter Timothy Inklebarger contributed to this report.