U.S. equities are the primary beneficiary of improving global investor sentiment, according to the BofA Merrill Lynch Survey of Fund Managers for December.
About 44% of respondents expect the world’s economy to strengthen in 2011, compared to 35%. And with the continuing problems in Europe’s debt market, investors are turning to U.S. equities, according to the survey. “Despite rising confidence in global growth, the survey shows that Europe is losing investor support as political procrastination and banking concerns overshadow a strong corporate outlook,” said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research, in a press release. Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research, added: “The pending new tax deal in the U.S., combined with QE2, has restored confidence in the prospects of U.S. companies, at a time that Europe is out of favor and investors are questioning Chinese growth prospects.”
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