BANK OF AMERICA

Newsroom

 

Facts & Resources

BofA Merrill Lynch Fund Manager Survey Finds Global Economic Outlook Deteriorating on China, EM Concern

Risk Off as Cash Holdings Reach 2008 Crisis Levels

Tuesday, September 15, 2015 8:30 am EDT

Dateline:

NEW YORK

Public Company Information:

NYSE:
BAC
"Investors were already positioned for lower growth in China and emerging markets, but their risk-off stance has intensified. Contrarians will be noting the aggressive underweight positioning in emerging markets"

Global investors’ confidence in the world’s economic outlook has fallen significantly due to concerns over China and emerging markets, according to the BofA Merrill Lynch Fund Manager Survey for September. Asset allocators have adopted a “risk-off” stance in response.

  • Threat of recession in China increases as biggest tail risk; concern over a potential emerging markets debt crisis also rises sharply.
  • Investors’ risk appetite evaporates: equity overweights are down a net 24 percentage points in a month, while commodity shorts are extended.
  • Sentiment towards Global Emerging Markets sours further, with underweights at a record net 34 percent and aggressive UWs are at an all-time high.
  • Cash balances are back up to 2008 crisis level of 5.5 percent.
  • Hedge fund net exposure and perception of market liquidity conditions are both at the lowest level in three years.
  • Investors’ expectation of U.S. Fed rate rise has been postponed to Q4.

“Investors were already positioned for lower growth in China and emerging markets, but their risk-off stance has intensified. Contrarians will be noting the aggressive underweight positioning in emerging markets,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

“European equities have been hurt by the risk-off trade, but they remain a favored market,” said James Barty, head of European equity strategy.

Fund Manager Survey
An overall total of 214 panelists with US$593 billion of assets under management participated in the survey from 4 September to 10 September 2015. A total of 178 managers, managing US$480 billion, participated in the global survey. A total of 96 managers, managing US$204 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Global Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world.

BofA Merrill Lynch Global Research
The BofA Merrill Lynch Global Research franchise covers almost 3,400 stocks and 1,200 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named Top Global Research Firm of 2014 by Institutional Investor magazine; No. 1 in the 2015 Institutional Investor Latin America survey; No. 1 in the Institutional Investor 2015 Emerging EMEA Survey; No. 2 in the 2015 Institutional Investor All-Asia survey; and No. 2 in the 2015 All-America Fixed Income survey for the fourth consecutive year. The group was also named No. 2 in the 2014 Institutional Investor All-America survey and No. 2 in the 2014 All-China survey.

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with 31 million active users and approximately 18 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and a member of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

Visit the Bank of America newsroom for more Bank of America news.

www.bankofamerica.com

Contact:

Reporters May Contact:
Melissa Anchan, Bank of America, 1.646.855.3152
melissa.anchan@bankofamerica.com
Tomos Rhys Edwards, Bank of America, +44.20.7995.2763
tomos.edwards@baml.com