Investors scale back emerging markets equity exposure: BofA

In a complete reversal from five years ago, emerging market economies are "most unloved

RELATED ARTICLES

ever" and are now seen as the biggest risk to financial market stability, according to the latest Bank of America Merrill Lynch Fund Manager survey.

Moreover, it said, investors are the most underweight on BRIC countries - Brazil, Russia, India and China - in the history of our data.

About 43 per cent of respondents are of the opinion that global emerging market (GEM) equities are "undervalued" and this in turn could lead to a "contrarian rally", according to the global financial services major.

"Indeed, global emerging market equity allocations are now the lowest on record, but with net 43 per cent saying emerging market equities are undervalued, a contrarian rally may be approaching," the BofA-ML report said today.

Around five years ago emerging markets were "safe" and banks were "toxic". In a complete reversal, emerging market is now seen as the biggest risk to financial market stability.

Emerging market investors are close to record underweights in Russia, Mexico, Thailand, Turkey, South Africa, Brazil, and Colombia.

"Growing fears of a hard landing for China's economy have further marginalised emerging market equities," the survey noted, adding: "One glimmer of hope for GEM is that the number of investors seeking to underweight the region in the coming year has eased slightly."

A net 24 per cent of global investors would like to underweight GEM in the next 12 months, down from a net 28 per cent in January.

Meanwhile, investors have sent a clear signal that sentiment toward developed world equities remains strong, the survey added.

Overall, 222 panelists with USD 591 billion of assets under management participated in the survey from February 7 to 13 this year.

The survey was conducted by BofA Merrill Lynch Research with the help of market research company TNS.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Time and tide are ripe for megaplans such as Sagarmala

    To say that India’s infrastructure is in urgent need of upgrade would be to state the obvious.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Taslima Nasreen

No place for the poor anywhere

As we sit in the comfort of our homes reading ...

Purnendu Ghosh

Are you worth remembering?

One of the best inscriptions I have come across in ...

Dharmendra Khandal

Tiger in urban landscape

Ranthambhore is in a no-win situation. Just a few days ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture