View more on these topics

US recession replaces China as fund managers’ biggest fear

US-USA-America-Rally-Flag-700.jpg

Fund managers’ biggest fear is a US recession, replacing worries about the fallout from China, as managers are negative on both global growth and profits.

The latest Bank of America Merrill Lynch fund manager survey shows that the biggest tail risk facing markets is a US recession, with 27 per cent of managers selecting it. It replaces the fallout from China which was the top concern in the previous survey.

This was closely followed by emerging market or energy debt defaults, at 23 per cent.

For the first time since July 2012, fund managers’ global growth and profit expectations have both turned negative.

Fund manager wariness on markets has led to the highest cash holdings since November 2001, at an average of 5.6 per cent.

Looking to the most crowded trades, fund managers are pouring into the US Dollar, shorting oil and emerging markets, and buying into tech giants Facebook, Amazon, Netflix and Google at 12 per cent.

The shifts in portfolio reflect fund managers’ need for capital preservation, with moves into cash, utilities, bonds and telcomms and out of banks and equity markets.

Recommended

George-Osborne-Serious-At-Budget-2014-700.jpg
1

Osborne warns over ‘dangerous cocktail’ of economic risks

The UK faces a “dangerous cocktail” of new economic threats that could hit growth in 2016, George Osborne is to warn. In a speech later today, the Chancellor will set out the key factors weighing against global growth this year, the BBC reports. He will say: “Anyone who thinks it’s mission accomplished with the British […]

Europe 2017: Value, large-caps & liquidity

Joshua Ausden, Head of Client Investment Strategy, Neptune Read more here Important Information – for Investment Professionals Only. Not for Retail Clients.Investment risksNeptune funds may have a high volatility rating and past performance and forecasts are not a guide to future performance. These are Neptune’s views and as such this document is deemed to be […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Not sure I quite understand this article. It says there is a negative expectation from fund managers re profit and growth on a global basis. The last time this happened was in 2012 and “global” presumably includes America.
    According to my copy of Money Management (Feb) the average-repeat average-North American fund returned over three years the sum of £1,611 for £1,000 invested (corresponding UK All Companies figure £1,345).
    A recent article in the Times newspaper (5th January) by the economics editor of Sky News suggested that one of the certainties in economics is that the experts will get it wrong; the article actually concludes “…predicting the future? Forget it”). I’m with him.

Leave a comment