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Fund managers exercise caution in fourth quarter
Global fund managers are treading carefully in the fourth quarter of 2011, with half of the managers surveyed by HSBC underweight equities.
HSBC analysed 13 of the world's leading investment houses in its quarterly Fund Manager's Survey, based on funds under management (FUM), asset allocation and global money flows.
A key finding of the survey was that 44 per cent of fund managers were overweight cash in October and November 2011. By comparison, no global fund managers surveyed were overweight cash in the third quarter of 2011.
HSBC Australia head of global investments Geoffrey Pidgeon said the "prolonged uncertainty in Europe and insipid US prospects" would continue to hamper global economic growth.
"The end of the quarter will be marked by a flight to 'safe havens' and a more cautious view on more risky assets as investors wait for things to turn in 2012," Pidgeon said.
The survey revealed that fund managers were eyeing selective growth opportunities, with almost half of investors remaining bullish on Chinese equities (44 per cent) and US equities (45 per cent).
"With expectations of less stringent monetary policies in China, investors are staying positive on Greater China equities … on the back of still-resilient corporate earnings and relatively undemanding valuations, the US equities market could also offer potential gains," Pidgeon said.
The key to riding out the sovereign debt crisis and the sentiment-driven, unpredictable markets it creates is to stay diversified and take a long-term view, Pidgeon said.
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