Fund managers are more downbeat on emerging market equities than they have been in the last 12 years, as allocations to the sector sink to their lowest levels since November 2001 according to a new survey.
The Bank of America Merrill Lynch August poll showed that while fund managers around the world fled emerging market stocks, they piled into developed markets, with U.K. exposure reaching a 10-year high and U.S. equities peaking at the third-largest overweight in the last 10 years.
Euro zone allocations also surged, reaching the highest level since January 2008, with 17 percent of global asset allocators overweight the region.
Michael Harnett, chief investment strategist and report author at BofAML argued that this en masse shun of emerging market equities has created short –term trading opportunities, while U.K and U.S. stocks now look over-owned.
“The August 2013 global fund manager survey shows that consensus is bullish on global growth, bearish on bonds and hates emerging markets. EM (emerging market) equity exposure fell to its lowest level…since November 2001,” said Harnett.
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