Global investors less optimistic on equities, commods -BofA poll
LONDON Apr 16 (Reuters) - Global investors were less optimistic about the global economy in April as the growth outlook for China deteriorated, weighing on commodity and equity allocations, a closely-watched survey of fund managers showed.
The monthly survey from Bank of America Merrill Lynch, published on Tuesday, showed a net 18 percent of investors underweight commodities, the worst level since January 2009. Fund managers were surveyed before a sharp sell-off in gold and the release of weak Chinese data this week.
The index reading shows the difference between overweight and underweight positions.
The poll of 200 fund managers dealing with combined assets of $578 billion, also showed equity allocations fell for the first time in eight months. Investors are now a net 47 percent overweight equities, compared with 57 percent in March.
Average holdings of cash rose to 4.3 percent in April from 3.8 percent a month ago.
"There was pretty substantial moderation in risk appetite from extreme levels seen earlier this year. Cash balance is really starting to respond," said John Bilton, head of European investment strategy at BofA Merrill Lynch.
"Commodities are bearing the brunt of de-risking. Chinese growth expectations are fading."
Gold has fallen 12 percent in the past two sessions, hitting a two-year low before recovering somewhat on Tuesday. Bilton said the investor view on gold and other commodities reflected expectations for monetary policy from the Federal Reserve and the Bank of Japan.
"There's now open discussion on whether the Fed will end its quantitative easing programme ... Improving macro data also undermines the case for safe-haven assets," Bilton said, adding that a strong dollar hurts appetite for the dollar-priced precious metal.
Only a net 9 percent of respondents in April expected a stronger Chinese economy, compared with 67 percent just four months ago. This has led to a fall in investor allocations to emerging markets on a net basis. Just 13 percent of global investors are overweight in the region, the lowest since October 2011 and down from 34 percent last month.
Within equities, there were bright spots. A net 20 percent of investors were overweight U.S. equities, the highest since June. Allocation to Japanese stocks rose for the 6th consecutive month to a net 20 percent overweight, a six-year high.
The survey's positioning data showed allocation to energy stocks fell to record lows while materials were the least favoured since January 2009.
"They (investors) chose to continue to hold equities, but they rotated within sectors," Bilton said. (Reporting by Natsuko Waki; Editing by Catherine Evans)