As the survey results show, there is still an overweight of around 9% even after the reduction of the cash ratio. On the other hand, growth expectations among fund managers are restrained: Currently, only around 18% of those surveyed think that the situation in the global economy could brighten up within the next 12 months – in January, 36% were still convinced of this. It is astonishing that the current figures are still well above last year’s lows.
In addition, fund managers expect inflation to decline over the next 12 months: With around 40% of the fund managers surveyed expecting a higher global CPI compared to January, much less so – 17% have apparently changed their opinion. With 67% of the participants, the vast majority see both growth and inflation falling below the trends assumed so far.
According to the report, there are signs of dwindling optimism in investor sentiment – away from inflationary assets such as energy and banks and towards deflationary winners such as technology, US equities, emerging market equities and bonds. The allocation to global equities increased by 1% to a net overweight of 33%. The allocation to US equities increased by 16% to a net overweight of 19%, the highest since September 2018. But the other sectors also increased: Emerging market equities were up 3% to 36% net overweight. Among sectors, the technology allocation dominates with a gain of 9% and a net overweight of 40% – the highest value since October 2016.