Fund manager optimistic as not for a long time

D.he relief from the finally foreseeable help in the fight against Corona through positive news from various vaccine manufacturers and the actually established outcome of the American presidential election moves many market participants. Your increased confidence has caused share prices to rise significantly again, even if the upward momentum has recently eased somewhat.

At around 13,150 points on Friday, the Dax is once again above the 13,000 point mark. At the end of October it was at a low of 11,450 points, around 13 percent less.

Bank of America’s latest survey of international fund managers also shows that investor sentiment is improving. The 216 fund managers surveyed, who manage around $ 573 billion around the world, are currently more optimistic than ever this year – thanks to vaccine reports, election results and economic data.

This confidence is also reflected in the significant decline in liquidity in the portfolios. The average share of cash in the funds of the surveyed asset managers fell from 4.4 percent in the previous month to 4.1 percent. That is less than before the outbreak of the corona pandemic in spring. At the time, the cash ratio was 4.2 percent. Nevertheless, from the perspective of these market participants, Corona remains the greatest risk for the financial markets. Most fund managers now believe that a reliable vaccine could be available sooner than previously expected in January 2021.

Optimism at 20-year high

In addition, the survey participants are very confident about the further development of the economy. Bank of America experts say that their optimism about global economic growth and corporate profits has reached its highest level in 20 years. A majority of around two-thirds of those surveyed speak of an early growth cycle in the global economy and not of a recession. Around three quarters of the survey participants expect the yield curve to steepen. One speaks of this when the difference between short-term and long-term interest rates, i.e. along the interest rate curve, increases.

These expectations are also reflected in the portfolios of the fund managers. According to the survey, 46 percent of these investors net weight – the proportion of optimists exceeds that of pessimists by the value – shares in their funds. This is the highest value since January 2018 and close to an extremely optimistic (“bullish”) area, according to Bank of America. One speaks of this with values ​​of more than 50 percent.

In terms of cash, however, the allocation reached its lowest level since April 2015. There is also a clear move towards riskier investments in emerging markets, stocks with smaller market capitalization, valuable stocks and among the banking sectors. In addition to cash, bonds, cyclical stocks and energy stocks, the fund has recently seen a lower weighting.


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