Global fund managers are betting on a recovery in Western economies, buying European and US stocks and cutting Japanese assets, according to polls of money managers published today.
The polls showed European, Japanese, British and US fund managers boosted holdings of European shares in August, and US and British managers also bought more US equities during the month.
But fund managers in each of the four polls cut back holdings of Japanese stocks and bonds, as recent optimism about structural reforms was overtaken by signs the economy remains in bleak shape.
Overall, investors remained positive on the prospects for stock markets and a global economic recovery, predicting a bottom could soon be reached after several difficult months.
"Given the balance of risks and given the decline we have seen we would not want to be short of equities," said Salomon Smith Barney global strategist Mr Shaun Roache.
"At this stage we think the balance of risks is pointing towards a rebound, led by the US, sooner rather than later" he said.
"There are signs the US economy is reaching a trough," said Mr Andrew Milligan, head of global strategy at $135 billion Standard Life Investments.
"Leading indicators, weekly retail sales, inventory sales ratios outside of the IT sector are under control. There are even signs earning numbers are starting to stabilise after the sharp downturn" he said.
Continental European fund managers were among the few polled who were sceptical about the prospects for US markets, preferring to invest money closer to home. The poll showed they cut US assets to buy more euro zone stocks and bonds.