The Markets August 19, 2009

Merrill Lynch Fund Manager Survey Finds Soaring Optimism

Fund manager optimism about the global economy is at its highest level in nearly six years, according to the Merrill Lynch Survey of Fund Managers for August.

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Portfolio managers are putting their cash back into equity markets, and a net 75% of survey respondents believe the world economy will strengthen in the next year. That’s the highest reading since November 2003 and up from 63% in July, according to the survey results.

A net 70% of the survey respondents expect global corporate profits to rise in the coming year (compared to 51% last month).

The optimism is being put to action, with cash balances falling and equity allocations rising. Average cash balances have fallen to 3.5% from 4.7% in July, their lowest level since July 2007, according to Merrill Lynch. A net 34% of respondents are overweight equities, rocketing from a net 7% in July.

Merrill Lynch points to global emerging markets, led by China, and technology stocks as the strongest engines behind the recovery. Investors would rather be overweight emerging markets than any other region (a net 33%). However, that shows a drop from July, when 48% of the respondents most wanted to be overweight in emerging markets.

As far as sectors go, technology is in the lead, with 28% of the surveyed global fund managers overweight the industry. Industrials, Materials, and Banks lag with global fund managers holding 11%, 12%, and 10% overweight positions, respectively.

A total of 204 fund managers, managing a total of US$554 billion, participated in the global survey from August 7 to 12 August. The survey was conducted by Banc of America Securities – Merrill Lynch Research with the help of market research company TNS.

Products August 19, 2009

Phoenix Unveils Dual Life Insurance Product

The Phoenix Companies, Inc., introduced a “first-to-die” universal life insurance product that covers two lives under one policy, designed for married couples or business partners.

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Phoenix Joint Advantage Universal Life (UL) pays a death benefit on the first death, according to the Hartford, Connecticut-based insurer.  It targets business partners who want to protect the other partner’s interest for buyout purposes or couples who want cash after one partner dies.

Clients can also purchase a rider enabling the surviving spouse or partner to buy a new Phoenix policy at that time with no need for medical evidence of insurability, Phoenix said.

The firm said the product offers flexible premiums that allow clients to decide when and how much to pay and offering the option for partners to have different amount of coverage. Clients can also choose either a fixed death benefit equal to the policy’s face amount or an increasing death benefit that equals the policy’s face amount added to its cash value.

Phoenix offers others riders for purchase as well as two free, optional riders: Policy Exchange Option Rider, which allows an exchange of the joint policy for two single life policies without evidence of insurability, and Overloan Protection Rider, which intends to prevent policy lapse (a taxable event) if loan debt should exceed cash value due to a heavily loaned policy.

“For many clients, it’s a significantly cost-effective alternative to the expense of two standard UL policies,” said Tom Buckingham, senior vice president, Product Development, Life and Annuity at Phoenix.

For more information, financial advisers can contact their Phoenix wholesaler, the Life and Annuity Sales Desk at 800.417.4769, or visit www.phoenixwm.com.


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