Markets

AllianceBernstein, BlackRock, top funds shun stocks for bonds, HSBC says

(Agencies)
Updated: 2010-06-16 14:41

Thirteen of the biggest money managers, including AllianceBernstein Holding LP and BlackRock Inc, are switching out of equities and into emerging markets and high-yield bonds, according to a survey by HSBC Holdings Plc.

"Fund managers have become less bullish on equities as the European debt crisis continues to impact the global economic recovery," the London-based bank's head of global investments for Australia, Charles Genocchio, said in the report on June 16. "In general, investors remain cautious, favoring bonds that provide diversified exposure."

Bank of America Corp's Global Broad Market Corporate Bond Index has returned 3.6 percent this year compared with a 2.3 percent decline for US stocks. According to HSBC, global bonds posted the biggest capital inflows across all asset classes, of $20.5 billion in the quarter to March 31, a 22.5 percent jump on the prior three months, while high-yield and emerging market bonds recorded inflows of $6.1 billion, up 9.6 percent.

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Three in four respondents were bullish, or optimistic, on emerging-market equities for the second quarter, while 88 percent held an "overweight" view on global emerging markets and high-yield debt. Overweight means buying more than the benchmark suggests. Those bullish toward European bonds dropped to 29 percent from 50 percent.

Although no fund managers held underweight views on stocks in Asia outside Japan, 63 percent said they were "neutral" going into the second quarter, up from 30 percent the first quarter of 2010. Asian speculative-grade dollar debt, which ranks below BBB- at Standard & Poor's, has returned 5.33 percent this year, HSBC indexes show.

HSBC's quarterly survey, conducted in April and May, canvassed 13 of the world's top fund managers by funds under management and money flows.