Global fund managers are optimistic towards equities in the first quarter of 2013, particularly in the United States and China, according to HSBC Bank Australia (HSBC).
"We do see a strong first quarter," HSBC head of wealth management Mike Danby told InvestorDaily. "There is optimism around the improving signs from the US and China. There are trends here that would imply it is more sustainable than just a single quarter position.
"What you're seeing from a North American perspective is some really good economic climates, manufacturing is showing some cyclical improvements, and I think housing prices have improved. There is a trend of improved stability there - it is far from perfect but there is no question of more optimism.
"The greater China story for us has always been an ongoing thing," Mr Danby said. "There have been ups and downs since 2012 but the expectation is that GDP growth in China will be 8.6 per cent growth in 2013."
Seventy-five per cent of global fund managers in HSBC's latest fund managers' survey are holding an overweight view towards equities in the first quarter of 2013 (compared to 40 per cent in the fourth quarter of 2012) while 25 per cent maintain a neutral outlook (versus 50 per cent in 2012).
More than six in 10 fund managers (versus 30 per cent in the fourth quarter of 2012) are underweight on cash as an asset class, while over a third (versus 20 per cent in 2012) are underweight on bonds. No fund manager holds a positive outlook on bonds or cash for the first quarter of 2013.
"The bearish sentiment of global fund managers towards cash next quarter underlines potential opportunities in the market," Mr Danby said.
In terms of bonds, high yield and emerging market bonds continue to be favoured by a majority of respondents as investors continue to look for yield in a prolonged low-interest environment.
