Investors are channeling most of their renewed risk appetite into global emerging market equities in the wake of an expected second wave of QE, according to the Bank of America Merrill Lynch October survey of fund managers. The level of risk that investors are taking in their portfolios rose more sharply than in any month since April 2009 while the proportion that are overweight equities nearly tripled. Managers are also more optimistic about China’s growth over the coming year.
FUND MANAGER ASSETS ROSE 16PC IN 2009
Assets managed by the world's largest 500 fund managers rose by 16 per cent in 2009 to $62 trillion by the end of the year, according to research by investment consultants Towers Watson. These inflows partially offset the 23 per cent loss of assets the previous year. However, assets are still below 2006 levels. Of the top 20 managers, 12 were US-based (managing 63 per cent of assets) while the remaining eight were European-based. Their share of assets increased to over 40 per cent.
STELLAR SEPTEMBER FOR HEDGE FUNDS
Hedge funds experienced their best month so far this year in September, as the Dow Jones Credit Suisse Hedge Fund Index rose 3.43 per cent. Nine out of 10 sectors posted positive performance while the best ones were long/short equity and emerging markets, which benefited from long directional exposure to the equity market rally in September. Only dedicated short bias funds, understandably, suffered from the improvements in the stock markets.