Institutional investors are becoming increasingly disillusioned with prospects for US corporate profits although global equity fundamentals are stabilising, the US brokerage house Merrill Lynch said in its latest fund manager survey.
According to 63 per cent of the fund managers surveyed between May 2nd and 9th, the US equity sector continues to be seen as relatively the most expensive market.
The managers are questioning the quality of US corporate earnings and US equity valuations,
"Anything but America seems to be the theme song of institutional investors right now," said Merrill Lynch chief global investment strategist Mr David Bowers.
But globally, fund managers said they saw the fundamentals for world equity markets stabilising.
"Fund managers are saying that the jury is still out on market recovery," said Mr Bowers. "Investors are saying it's too early to be sure that the worst is behind us. Nevertheless they remain fully committed to equities."
Separately, 83 per cent of those polled said corporate profits would strengthen over the next 12 months but only 14 per cent of them predicted it would be a "strong improvement".
On the global sector front, asset allocators found it easier to agree on what they did not like, and were more eclectic about what they did favour.
"Fund managers said they liked practically anything except technology, telecommunication or utilities," noted Mr Bowers.
AFP