In line with the improvement in the overall global macro-economic environment, the survey found 80% of fund managers have an overweight view on equities, but that the level of optimism had fallen slightly compared with the last survey carried out in January.
Reflecting the broader uncertainty that is persisting in markets, more fund managers had also increased their cash allocation.
Emerging markets were out of favour with no fund managers having an overweight, while those with an underweight stance increased to 60% from 23%. Despite being positive on US equities, their bullish view has gradually declined. Meanwhile, fund managers have become more cautious over Greater China equities while optimism seems to be have tampered over Japanese equities too.
The survey also showed fund managers are still less upbeat on bonds, with 60% of respondents adopting an underweight view, but with a slight improvement from January when 69% had an underweight view on bonds.
Fund managers continue to favour high yields, with 66% adopting an overweight position. There was a slight improvement in the outlook for Asia and emerging market bonds, even though the majority of the respondents still maintained a neutral stance.
Bruno Lee, HKIFA unit trust subcommittee chairman said: “Fund managers have, by and large, maintained similar asset allocation approaches in the past 12 months by turning more towards equities.
“Last year, the key interest was in the US and Japan. But in the past six months or so, there has been a slight change in focus as more turn towards Europe. Meanwhile, fund managers have become slightly less bullish on the outlook of U.S. and even less so of Japanese equities.”
The industry body conducted a survey of 15 leading fund houses representing global assets of around $9.1trn in late April on fund managers’ outlooks for the markets across different asset classes.
Results of the HKIFA Fund Managers Market Outlook Survey (late-April 2014)
|
Underweight |
Neutral |
Overweight |
||||
|
Apr 2014 |
Jan 2014 |
Apr 2014 |
Jan 2014 |
Apr 2014 |
Jan 2014 |
|
|
Equity |
7% |
0% |
13% |
15% |
80% |
85% |
|
Bond |
60% |
69% |
33% |
23% |
7% |
8% |
|
Cash |
36% |
50% |
43% |
42% |
21% |
8% |
|
Equities |
||||||
|
US |
13% |
15% |
34% |
23% |
53% |
62% |
|
Europe |
7% |
15% |
20% |
23% |
73% |
62% |
|
Asia (excl. Greater China) |
23% |
18% |
46% |
55% |
31% |
27% |
|
Greater China |
17% |
10% |
66% |
30% |
17% |
60% |
|
Japan |
6% |
0% |
47% |
42% |
47% |
58% |
|
Emerging Markets |
60% |
23% |
40% |
54% |
0% |
23% |
|
Bonds |
||||||
|
US |
43% |
33% |
36% |
50% |
21% |
17% |
|
Europe |
39% |
27% |
46% |
55% |
15% |
18% |
|
Asia |
0% |
10% |
83% |
80% |
17% |
10% |
|
Emerging Markets |
27% |
46% |
53% |
39% |
20% |
15% |
|
High Yield |
7% |
8% |
27% |
15% |
66% |
77% |
