Managers Say Bye Bye Bonds, Hello Equities!
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A large rotation out of bonds into equities could be underway, according to the BofA Merrill Lynch Fund Manager Survey for November. Despite fears over the so-called fiscal cliff, asset allocators have, for the fifth successive month, increased allocation to equities while reducing bond positions, noted the report.
A net 35 percent are overweight equities, compared with a net 25 percent in October. A net 35 percent of asset allocators are underweight bonds, up from a net 26 percent a month ago.
More investors are expecting higher interest rates as inflation expectations inch upwards.
"Momentum has gathered behind the idea that we are on the cusp of a 'great rotation' out of bonds and into equities. The only missing ingredient is a resolution to the U.S. fiscal cliff," Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research said.
Other risk assets aren't feeling the love. Allocations to commodities are down this month, allocations to real estate are unchanged while the proportion of allocators overweight alternative assets ticked upwards by a two percentage points to a net 9 percent.
An overall total of 248 panelists with US$695 billion of assets under management participated in the survey from November 2 to November 8.
A net 35 percent are overweight equities, compared with a net 25 percent in October. A net 35 percent of asset allocators are underweight bonds, up from a net 26 percent a month ago.
More investors are expecting higher interest rates as inflation expectations inch upwards.
"Momentum has gathered behind the idea that we are on the cusp of a 'great rotation' out of bonds and into equities. The only missing ingredient is a resolution to the U.S. fiscal cliff," Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research said.
Other risk assets aren't feeling the love. Allocations to commodities are down this month, allocations to real estate are unchanged while the proportion of allocators overweight alternative assets ticked upwards by a two percentage points to a net 9 percent.
An overall total of 248 panelists with US$695 billion of assets under management participated in the survey from November 2 to November 8.
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