TheStar
LONDON: Fund managers are increasingly pessimistic about emerging equities, though three-quarters of investors surveyed have gone overweight Russia, a Merrill Lynch survey showed on Wednesday.
The monthly poll of 190 global fund managers found investors at their most risk-averse since April 2001, with 40% now underweight global stocks, as the six-month-old credit crisis stokes fears of a US recession and a global slowdown.
Global emerging market investors showed the highest level of pessimism on profits since the GEM survey began in 2007.
But the survey found a big rise in investor preference for Russia.
“GEM investors maintain large overweight positions in Russia and Brazil. Russia is favoured over Brazil for the first time in our (global emerging markets) survey,” Merrill said, adding that funds were underweight India and China, the two other legs of the so-called BRIC countries.
“What we have seen is the increase in overweight in Russia in the past two to three months and the main driving theme to us is that the government has got a large oil surplus,” said Michael Penn, global emerging equity strategist at Merrill Lynch.
Investor confidence in China's growth was also at an all-time low, the survey found. – Reuters
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