The Markets December 14, 2010

Mood Brightens Among Money Managers

A Russell Investments poll found money managers confident in the global economy and its ability to sustain the U.S. equity markets following the global financial crisis.
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A news release said 88% of managers expect U.S. equity markets to rise over the 12 months ending December 2011. Forty percent expect the markets to increase by 10% or more in 2011.

Fifty-two percent of managers believe the markets to be fairly valued, compared to September 2010 when 57% of managers saw the markets as undervalued. Thirty-eight percent of managers responding to the latest survey believe the markets to be undervalued.

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Additional findings include:

  • Managers once again favor the technology sector above all others, marking the eighth survey in a row that technology has held the top spot. Eighty percent of managers are bullish on technology, compared to 69% in September 2010. Manager bullishness for the energy sector also rose considerably, from 51% in the previous survey to 68%.
  • Manager sentiment for the consumer discretionary and consumer staples sectors changed substantially and in opposite directions. Manager bullishness for consumer discretionary rose 17% from the last survey to 47%, while bullishness for consumer staples fell 10% points to 35%, making the sector the least favored after utilities (18% bullishness). 
  • Real estate has been among the least-favored asset classes throughout the history of the Investment Manager Outlook survey, but in the latest iteration manager bullishness for real estate reached an all-time high at 31%, up 10%.

More than 200 managers participated in the survey.

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