US fund managers turn aggressive; return to riskier assets

Indicating an improvement in the economic situation, fund managers in the United States are moving away from defensive strategies and are shifting to high risk options like emerging markets, a survey says.     

According to the latest Investment Manager Outlook survey conducted by Russell Investments, fund managers in the US are the most bullish about emerging markets and high yield bonds, which are considered the riskiest equity category and the riskiest fixed income category respectively.     

"Managers are indicating a much higher level of comfort with risk and appear to be making a rotation from defense to offense. To keep it simple, as anything but cash and Treasuries' appears to be the rule for managers right now," Russell Investments Client Investment Strategies Director Mark Eibel said.     

As per the survey, 74 per cent of the managers were bullish on emerging market equities, and 66 per cent were optimistic on high-yield bonds.     

However, respondents to this survey still believe that a credit market recovery is still some time away.     

Around 67 per cent of managers responded that they thought it would take either six months or one year for the credit markets to cease their hindrance of a market recovery, the report said.