Fund managers continue to favour equities in the second quarter of 2013 with no one holding underweight views towards this asset class, according to 57% of global fund managers (vs 75% in 1Q13) covered in HSBC’s latest fund managers’ survey.
A tenth of respondents (14%) turned overweight towards bonds and cash in 2Q13 from none in the previous quarter (0% for both in 1Q13). Over two in five fund managers (43%) hold an underweight view towards bonds and cash compared to 38% and 63% respectively in 1Q13.
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Vineet Vohra, HSBC’s regional head of wealth development, Asia Pacific, said: "Global fund managers generally remain optimistic about the prospects of equities. Emerging markets equities including Asia equities continue to be attractive as a result of better fundamentals. However, it is worth noting that some managers have turned cautious due to renewed concerns on the eurozone debt crisis."
In terms of bonds, Asian local currency bonds (75%) stand out given the region’s stronger fundamentals and potential currency appreciation. With the US dollar under pressure from the Fed’s continued support for quantitative easing, four in five fund managers are underweight US dollar bonds and none of them holds an overweight view towards this asset class.
Bond funds were the major contributors to the FUM growth, representing 40% or around US$50 billion of the total increase.
All equity and bond markets except North America equities and global bonds recorded positive returns in 4Q2012. Greater China equities were the best performer with a 12.9% growth, followed by Europe including UK equities (+7.0%), and Asia Pacific ex-Japan equities (+6.0%). On fixed income, Europe including UK bonds recorded 4.6% return and high yield/emerging markets bonds went up 3.9%.
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