This months Merrill Lynch Global Fund Manager Survey shows that asset allocators have moved overweight in equities for the first time in more than a year.
The impressive performance of equity markets over the past three months has resulted in a net 9% overweight in the asset class, while bonds allocations were reduced to 15% underweight, and cash holdings also fell.
Much of this positive sentiment has focused on emerging markets, and particularly Asian markets. A net 62% of respondents said they believe the Chinese economy will improve over the next 12 months.
Partly because of the demand for natural resources that this would entail, the outlook for commodities has also improved, with the overweight rising steeply from a net 7% in May to 19% this month. Russia was a major beneficiary of the commodity play, with its weighting up significantly from last month compared with its emerging market peers.
The Merrill Lynch Global Survey of Fund Managers was carried out between June 5-11 with 226 investors surveyed responsible for a total of $620 billion (382 billion) of assets under management.