Merrill Lynch Fund Manager Survey: Average cash balances high – proportion of asset allocators overweight equities has dropped – demand for protection has increased to highest level in 22 months – net 31 percent of global asset allocators underweight EM equities – new record low.
– 81 percent of investors said they see geopolitical risk posing a threat to financial markets stability – more than four times the reading one month ago.
– 27 percent of investors say that a geopolitical crisis is the biggest tail risk – up from 12 percent in February.
– The proportion of investors taking lower than average risk in their portfolio has increased to a net 14 percent from a net 2 percent in February.
– A net 16 percent of global asset allocators say that they are overweight cash, up from a net 12 percent last month.
– Average cash balances remain high at 4.8 percent of portfolios.
– The proportion of asset allocators overweight equities has dropped by nine percentage points month-on-month to a net 36 percent.
– Demand for protection against sharp falls in equity markets has increased to its highest level in 22 months.
– A net 47 percent of regional fund managers in Japan, Asia Pacific and global emerging markets expect China’s economy to weaken in the coming year, up from a net 41 percent a month ago.
– The proportion of global asset allocators underweight emerging market equities has risen two percentage points month-on-month to a net 31 percent – a new record low.