The poll, which gathered the views of 237 fund managers running assets of more than $650bn (€470bn), found a net 34% of participants overweight Japanese stocks in early December – up substantially from the 24% recorded last month, and the most positive result for the asset class since May 2006.
For eurozone equities, a net 43% of panellists were overweight – a month-on-month increase of two percentage points. Appetite for the asset class reflected a bullish consensus on the region, with more than four-fifths of managers expecting the European economy to strengthen in 2014.
“Belief in the European recovery has reached a stretched level, leaving markets vulnerable to profit taking as portfolio managers seek uncrowded alternatives,” warned John Bilton, a European investment strategist at BofA Merrill Lynch Global Research.
Nevertheless, demand for Japanese and eurozone equities appears unlikely to wane in the near future, the company notes. When asked which equity market they would most like to overweight, 22% of survey respondents chose Japan, while almost a quarter selected the eurozone.
Growing appetite for the two regions tallies with the Expert Investor Europe Manager Sentiment Survey, which shows that fund managers have been consistently bullish on Japanese stocks since the end of 2012, and positive on European (ex UK) equities since the summer of 2013.
Platinum members can view the latest Expert Investor Europe Manager Sentiment Survey here.