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In the investing world the sentiment of fund managers is a big factor. Why is this? Fund managers are the ones who decide when to invest the fund"s money and how much to invest. For example, a manager who is more optimistic may decide to shift a portion of the fund's investments from bonds into stocks.With this in mind, Bank fo America Corporation's (NYSE: BAC) Merrill Lynch did a survey of fund managers and found that fund managers who were predicting that the global economy will worsen has fallen to its lowest level since the start of the credit crisis. The poll included 177 institutional investors controlling $599 billion dollars in assets. The percentage forecasting a deteriorating economy has fallen from 60% last October to 6% in February.
With regard to emerging economies like China, only 21% expect a prolonged slowdown compared with 70% the previous month.
The overall sentiment seemed to leave fund managers in a no man's land. While they would like to be more aggressive they are still too cautious to to make any strong commitments at this time.Even with this small spark of optimism, the number of fund managers moving overweight into cash has risen.
Do you know what your fund manager plans to do this year?
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Reader Comments (Page 1 of 1)
2-25-2009 @ 4:27PM
aphor said...
This is garbage. Fund managers see no upside to advising anyone of additional doom and gloom: everyone (who can) knows and has completely pulled back. Now the funds need capital in order to start cherry picking survivors and recovery opportunities, investors are still too shy. The implication that this is optimism is complete garbage. They're only optimistic because the downside is approaching zero and appears to be controlled.