GLOBAL investor sentiment improved in September for the first time since June on optimism over a soft landing and interest rate cuts by the US Federal Reserve, a BofA survey of fund mangers published on Tuesday (Sep 17) showed.
According to the survey, cash allocations fell to 4.2 per cent with investors also rotating to bond-sensitive assets from cyclicals, driving overweight allocations to utilities to the highest since 2008. Commodity exposure, meanwhile, fell to a seven-year low.
BofA said investors in the survey were best described as “nervous bulls”.
Signs of a slowdown in the US labour market and a deterioration in other economic metrics have prompted traders to raise bets on an unusually large rate cut at the Fed’s policy meeting this week.
Stocks have hit record highs and bond prices have also rallied sharply as investors price in the prospect of relief from several years of sky-high interest rates.
“52 per cent of fund manager survey investors believe there will be no recession for the US economy in the next 18 months,” the bank said.
The survey, which covers the period from Sep 6 to Sep 12 and canvassed 243 panellists with US$666 billion in assets under management, showed six out of 10 polled believed interest rates were too restrictive, marking a 16-year high. REUTERS
