Merrill Reports Sharp Turnaround in Investor Sentiment

According to the May Merrill Lynch & Co.'s global fund manager survey, sentiment towards the global economy has completed a sharp turnaround from October 2008, when a net 60 percent of investors forecasted a worsening outlook. In May’s survey, a net 57 percent say the economy will improve over the next 12 months, up from 26 percent in April. Investors have moved to a net underweight position in bonds for the first time since last August. Many are rushing to emerging markets. A record net 40 percent of fund managers are looking to overweigh the region in the next 12 months.

The survey also revealed that the number of investors underweighing Japan is decreasing. Nikkei reported foreign investors turned to net buyers in April for the first time in eight months.