Thursday, 25 December 2014
Last updated 1 day ago
Apr 15 2010 | 10:17am ET
For hedge fund managers, the U.S. economy increasingly looks just right, according to a new survey.
More than seven in 10 managers think that corporate earnings will rise 10% or more over the next year, and the number of managers expecting both above-trend growth and below-trend inflation soared from 21% in March to 32% this month, according to the Bank of America Merrill Lynch Survey of Fund Managers. Indeed, fully 42% of respondents say there will be no Federal Reserve interest rate hikes this year at all, up from 38%.
“April’s survey shows a growing number of investors envisaging a Goldilocks scenario of above-trend growth and benign inflation,” Michael Hartnett, chief global equities strategist, said. “The findings are consistent with the view that the U.S. consumer, far from remaining in intensive care, is on the path back to good health.”
And so hedge funds are piling back into stocks, with 52% overweight equities, up from 33% in February. And average cash holdings have fallen, as well, from 3.8% last month to 3.5% this month.
Forty-two percent of hedge fund managers expect companies to increase their operating margins over the next year, up from 27%. One-quarter say payout ratios are too low, up from 20%, and only 23% say debt reduction should be a priority, the lowest level in more than a year.
BofA Merrill Lynch polled 197 fund managers with $546 billion in assets.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.