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asset allocators embracing risk

The BofA Merrill Lynch Fund Manager Survey for January, which sought the views of 234 panellists running combined assets of more than $650bn (€480bn), revealed that 4% were taking higher-than-normal risks – only the fourth “solidly positive” result since 2001 (see chart).alt=''

Elevated risk appetite was reflected in a range of survey findings, including participants’ desire for global equities.

Indeed, a net 55% of fund managers were overweight stocks, continuing a trend which began in the summer of 2012, when a net 4% were underweight the asset class.

Risk-taking was also evident in asset allocators’ preferred equity sectors – they were overweight technology, industrials and banks; and underweight utilities, consumer staples and telecoms.

Equities preferred

ING Investment Management’s Risk Rotation Survey of global institutional investors, conducted in November, revealed a similar picture. More than half of the poll’s 79 respondents said their risk appetite had increased over the preceding quarter, with only 11% reporting a decrease.

Almost three-quarters favoured equities over the other major asset classes – up from 64% in the third quarter – with real estate in second place on 45%, up from 34%.

Research by Expert Investor Europe shows that fund selectors expect to further increase their equity allocations this year. Appetite for European stocks is particularly strong in southern Europe, with four-fifths of Portuguese and Spanish professional investors planning higher weightings.

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Part of the Mark Allen Group.