Sections

Recession threat dampens inflation fears

Related images

  • Recession threat dampens inflation fears

EUROPE - European fund managers are looking to healthcare stocks as a safe haven as risk appetite plumments, according to Merrill Lynch.

Managers have started reassessing inflation risks as secondary to the effects of economic contraction, according to the investment bank.

In its latest Survey of Fund Managers, Merrill Lynch gauges that inflation is perceived as less of a problem than previously, as a net 24% of respondents forecast that inflation will fall over the coming 12 months, down from 32% one months ago.

That said, the survey, which polled the opinions of 191 fund managers globally who manage a total of $610bn (€384bn), shows that risk appetite among institutional investors has hit rock bottom as the recession loom increases, with almost all respondents stating they believe Europe's economy will weaken over the next 12 months.

The survey shows that particularly emerging market equities have lost out on healthcare stocks - according to Merrill Lynch a traditional safe haven from wider economic trends - as a third of investors in Europe have a net overweight position in healthcare and pharmaceuticals, compared with none in June.

Karen Olney, chief European equities strategist at Merrill Lynch, said: "What investors are looking for right now is immunity from the ills of the market place and the healthcare sector provides that."

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2444

    Asset class: Trade Finance.
    Asset region: Global.
    Size: USD 10m.
    Closing date: 2018-06-25.

  • QN-2452

    Asset class: Hard Currency.
    Asset region: Emerging markets.
    Size: USD 300 mil..
    Closing date: 2018-06-22.

Begin Your Search Here