August sees investors start to turn bullish

City A.M. Reporter
A GROWING belief among British investment managers that fears of a renewed economic slump are overblown has halted a five-month decline in allocations to stocks, according to a Reuters poll.

The survey of 11 British fund managers polled on asset allocations in August shows the average exposure to equities jumped more than three percentage points from a month earlier.

The average allocation to equities climbed to 49.8 per cent in August, compared with 46.4 per cent in July. Allocations to bonds fell to 24.2 per cent from 25.5 per cent.

The effect is exaggerated by the participation in August of a large equities-heavy fund manager who did not answer the poll in July but the trend remains the same if results are compared on a like-for-like basis.

The move to shares follows five months in which managers pared allocations to stocks, mostly in favour of bonds.

“Concerns about a double-dip recession are certainly overblown. Too few investors look at economic history. In reality such events are really rather rare,” said Andrew Milligan, head of global strategy at Standard Life investments.