Investors are turning to Eurozone stocks from U.S. equities, the fifth largest rotation since 1999, despite the coming French election. Allocation to Eurozone equities rises to 15-month highs (net 48% overweight)...
A record number of investors (net 83%) find U.S. stocks to be overvalued, while 32% say global equities are overvalued, near 17-year highs
Fund managers cite EU disintegration as the biggest tail risk (23%) - though this fear has dropped sharply in the past 2 months - closely followed by a delay in U.S. corporate tax reform (21%) and trade war (17%)
Japan equity allocation saw its first observable decline since the U.S. election, but investors are still overweight (15%)
“Investors are showing love for Europe and scrambling out of U.S. equities, as the majority find U.S. stocks overvalued and perceive a risk of delayed U.S. tax reform,” said Michael Hartnett, chief investment strategist.
Ronan Carr, European equity strategist, added that, “In spite of the French Presidential election starting in less than a week, investors’ perception of Europe is increasingly bullish. Although we agree on the allure of Europe’s earnings recovery, complacency looks extremely high.”
Commenting on the Japanese market, Shusuke Yamada, chief Japan FX/equity strategist said, “Investors’ perception of Japanese equities is being negatively influenced this month by the lowered expectation for US tax reform and the tail risk of EU disintegration, which weigh over EUR/JPY and USD/JPY.”
Next Finance , April 20
BofAML’s April Global Fund Manager Survey was conducted April 6-12; 203 panelists with $593bn AUM participated total. 172 participants with $498bn AUM responded to the Global FMS questions and 96 participants with $235bn AUM responded to the Regional FMS questions.
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