Fund Manager Optimism Towards China Has 'Exploded'

China communist party singers

Photo: ChinaFotoPress/Getty Images

These are interesting bullet points from a Bank of America fund manager survey.Fund managers…

  • Are more optimistic on global growth: readings have improved for all of the economy, inflation and corporate profits.
  • And this is down to optimism on China exploding – growth expectations at 3y highs!
  • Are nevertheless more cautious about Europe: European growth expectations (net 10% seeing weaker growth in 2013 vs net 9% seeing stronger growth prev.) have de-correlated from global growth expectations in November
  • Are still hating Japan: most contrarian regional trade
  • Hedge Funds exposure to Equities rose to its highest (40%) since 2007.
  • While a majority of investors (>70%) still believes that the US fiscal cliff is not priced into Equities – still #1 tail risk.

The Chinese optimism is very interesting.

This is a big theme we’ve been hitting on lately. Chinese sentiment is booming, US is fading.

Still, we’re surprised to see it characterised as “exploding.”

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