Experts believe that large investors began to move out of equities into cash because of Greece’s expected default, interest rates hike by the US Fed, and a bubble on the Chinese stock exchange. Two hundred and seven portfolio managers, whose assets total $562 billion, took part in a survey carried out on June 5-11.
“Higher cash levels show how caution is in the air, with 65 trading days until we expect the Fed to tighten,” said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch Global Research.
Investors expect the rates to reach the highest level since May 2011, while 80% of them anticipate an increase in short-term rates.
The number of investors putting in equities decreased to 38% from 47%. At the same time, share of cash jumped to 4.9% from 4.5% in May.
The Greek default is expected by 42% of respondents, including those who consider the Grexit rather possible. The International Monetary Fund ended negotiations over financial aid to Greece and now Athens has to find a way to deal with the situation on its own until making repayment of €1.6 billion to the creditors.
Seven out of ten surveyed portfolio managers think that China’s economy shows a slowdown and that there is a bubble on the Chinese market.
