Eurozone re-entersWith macroeconomic views of the eurozone increasingly positive, investors are positioning for gains in the region’s equities. A net 20 percent of respondents would overweight the market on a 12-month view – this marks the survey’s highest reading on this measure in over six years and makes the region investors’ top choice on this horizon, ahead of Japan. Already, a net 17 percent reports being overweight currently, a 14 percentage point rise since last month. Sentiment would improve further if a European banking union were implemented, the survey makes clear. This remains the key factor for a full revival of European risk appetite, according to panelists, though they also look for structural reforms in peripheral economies and evidence of strong corporate earnings. GEM sentiment still sour Investors’ weak conviction towards global emerging markets (GEM) is evident from their reported net 19 percent underweight in GEM equities. This further weakening compared to last month represents the lowest level recorded in the survey in nearly two years, even though more than three-quarters of specialist fund managers view GEM equities as undervalued. Nonetheless, some positive GEM stories stand out from the survey. In particular, Korea (broadly referring to South Korea's Kospi Index) has seen a notable turnaround in sentiment since last month. GEM specialists now rank the market one of their top picks (alongside China and Russia), from a net 21 percent underweight in July. Call for more capex Given the strength of the macroeconomic outlook, companies should be committing more resources to capital expenditures that could secure and even enhance their future growth, in investors’ view. A net 64 percent of panelists believe that corporates are under-investing in their businesses, up a further six percentage points from July’s strong reading. Investors’ call for more aggressive capex reflects doubts over the strength of future corporate earnings. The survey reveals improved profit expectations, with a net 43 percent of global fund managers looking for better EPS in the next year - the measure’s highest level since early 2011.
But only a minority (32 percent) judges that the global corporate universe is likely to achieve double-digit EPS over the period.Survey of Fund ManagersAn overall total of 229 panelists with US$671 billion of assets under management participated in the survey from 2 August to 8 August. A total of 180 managers, managing US$516 billion, participated in the global survey. A total of 112 managers, managing US$290 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Global Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world. BofA Merrill Lynch Global ResearchThe BofA Merrill Lynch Global Research franchise covers over 3,500 stocks and nearly 1,100 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named Top Global Research Firm of 2012 by Institutional Investor magazine; No. 1 in the 2013 Institutional Investor All-Asia survey for the third consecutive year; No. 1 in the Institutional Investor 2013 Emerging Market & Fixed Income Survey; No. 2 in the 2013 Institutional Investor All-Japan survey for the second consecutive year and No. 2 in the 2012 All-China and All-Latin America surveys; No. 3 in the 2013 Institutional Investor All-Europe survey and No. 3 in the 2012 Institutional Investor All-America survey. The group was also named No. 2 in the 2012 Institutional Investor All-America Fixed Income survey; and No. 3 in the 2013 All-Europe Fixed Income Research survey. Additionally, BofA Merrill Lynch Global Research was named the No. 1 Global Broker by Financial Times/StarMine, as well as ranked No. 1 in the U.S. and Europe and No. 2 in Asia. The group was also named No. 1 in Asia and No. 2 in the U.S. in the Wall Street Journal Best on the Street 2012 Analysts Surveys.
Bank of AmericaBank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. We serve approximately 51 million consumer and small business relationships with approximately 5,300 retail banking offices and approximately 16,350 ATMs and award-winning online banking with 30 million active users and more than 13 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and a member of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed. Visit the Bank of America newsroom for more Bank of America news. www.bankofamerica.com