Global growth optimism at all-time low, fund manager survey finds

By Saikat Chatterjee

LONDON (Reuters) -Optimism amongst fund managers over world progress has hit an all-time low, whereas considerations the world financial system is heading right into a stagflation situation rose to the best since August 2008, a month-to-month survey by funding financial institution BoFA Securities confirmed on Tuesday.

The survey, which took the views of corporations managing a complete of greater than $833 billion, is without doubt one of the largest common exams of fund supervisor views and comes as inflationary pressures rise whilst the chance of recession will increase in main economies.

Requested about their expectations for world progress within the coming months, a web 71% of survey respondents had been pessimistic about prospects, probably the most because the survey information started within the early Nineteen Nineties.

Although fund supervisor holdings of money – historically an indicator of investor warning – eased to five.5% within the April version of the survey from 5.9% within the earlier month, prospects of a worldwide recession stay the highest “tail danger” for world markets, the survey discovered.

The Russia-Ukraine battle has receded to fourth place.

Allocations to commodities jumped to a report 38%, with investments into oil and commodities zipping up the charts to turn out to be the highest most “crowded commerce”.

Different “lengthy” positions had been in sources shares and healthcare, whereas “quick” bets – by traders anticipating a decline in costs – had been evident in bonds and cyclical shares whose efficiency is most linked to financial progress, BoFA stated.

Individuals within the survey count on the U.S. Federal Reserve to boost rates of interest by as many as seven instances within the present cycle, in contrast with 4 instances within the earlier version, with a majority of traders anticipating inflation to melt over the following 12 months.

World revenue expectations deteriorated to their weakest ranges since March 2020, BoFA stated.

By way of regional inventory market allocations, traders had been most bullish on U.S. equities, whereas European and UK equities had been the highest bearish bets.

The survey was performed between April 1 and April 7.

(Reporting by Saikat Chatterjee; Enhancing by Samuel Indyk and David Holmes)