Manager optimism about the global economy declined significantly in August, but respondents to the latest monthly Bank of America Merrill Lynch Survey of Fund Managers also say a double-dip recession is unlikely.
A net 13% of managers believe the global economy will experience weaker growth compared with a net 19% in July who were confident the economy would improve, according to a BofA Merrill Lynch news release detailing the survey's findings.
A net 42% of managers said a global recession is still unlikely in the next 12 months.
Managers reduced allocations to U.S. equities to a net 1% underweight position in August from a net 23% overweight position in July. A net 14% of U.S. managers believe the U.S. economy will weaken, compared with a net 29% expecting a stronger economy in June.
Managers remained underweight in eurozone equities, although the position fell to a net 15%, from a net 21% a month earlier. A net 71% of managers expect the European economy to weaken, compared with a net 22% in July.
However, “a strong majority” of managers do not believe Europe will go into recession, according to the release.
Overweight positions in emerging markets remained strong with a net 27% of managers overweight, down from a net 35% a month earlier.
A net 11% of managers in Asia believe China's economy will weaken, down from a net 24% in July.
The survey of 244 fund managers, overseeing $718 billion, was conducted Aug. 5-11.