Global funds buy more stocks, optimistic on growth- BofA poll

LONDON Tue Nov 13, 2012 6:05pm GMT

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LONDON Nov 13 (Reuters) - Global investors raised their exposure to stocks to a 16-month high in November, taking a more optimistic view on the world economy despite concerns about the U.S. 'fiscal cliff', a survey showed on Tuesday.

A net 34 percent believe the world economy will strengthen in the next 12 months, the highest reading since February 2011, Bank of America/Merrill Lynch (BofAML) said in its monthly asset allocation survey.

Investors were also more optimistic about China, with confidence that its economy will strengthen in the coming year at a three-year high among investors surveyed in Asia Pacific, emerging markets and Japan.

The poll showed 54 percent see the biggest tail risk as a failure by U.S. politicians to reach a compromise on spending cuts and tax rises scheduled to take effect at the turn of the year, up from 42 percent in October.

The euro debt crisis is now the biggest concern for only 25 percent of investors despite a gloomier view of the economy - a net 10 percent see weaker growth in Europe in 2013.

Most of the 248 panelists, with $695 billion of assets under management, took part in the Nov. 2-8 poll before the U.S. election.

"Momentum has gathered behind the idea that we are on the cusp of a 'great rotation' out of bonds and into equities. The only missing ingredient is a resolution to the U.S. fiscal cliff," said Michael Hartnett, chief investment strategist at BofAML Global Research.

A net 35 percent are overweight equities, while a net 35 percent are underweight bonds, the survey showed.

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