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>>BP spill prompts exodus from energy?

Fund Strategy - Adam Lewis - 4 hours ago

The fallout from the Gulf of Mexico oil spill has led global fund managers to cut their energy weightings in record numbers, according to the latest Bank of America Merrill Lynch Fund Manager survey.

In June a net 7% of global asset allocators were overweight in the energy sector, down from a net 37% in May, which Merrill Lynch claims is the biggest monthly swing the survey has ever recorded.

Managers remain cautious about the prospects for global economic growth, with a net 24% predicting the world economy will strengthen in the next 12 months. This is down from 42% in May and 61% in April. (article continues below)

Despite this wariness, however, global managers dropped their cash levels from 4.3% in May to 4.1% in June, although asset allocators did raise their cash overweights to the highest level since May last year.

Gary Baker, the head of European equity strategy at Bank of America Merrill Lynch Global Research, says: “There seems to be little panic among investors and managers now see equity valuations at their cheapest level since March 2009.”

Negative sentiment to­wards the eurozone, which peaked in last month’s survey, has abated. The percentage of global managers who said they would underweight Europe fell to a net 12% in June, down from 30% in May. There was also a change in currency views, with managers taking their least negative view on the euro since November 2006. In June only a net 14% of managers viewed the euro as overvalued, versus 45% in May.

A total of 207 fund managers with $606 billion (£411 billion) of assets participated in the survey. It was conducted in partnership with TNS, a market research firm, from June 4-10.

http://www.fundstrategy.co.uk/markets/bp-spill-prompts-exodus-from-energy/1013666.article