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Australian fund managers turn bullish on cash, shares


Tuesday, September 29th, 2009

Australian fund managers have turned bullish on holding cash and shares according to a survey by the investment management company, Russell Investments.

The firm’s quarterly Investment Manager Outlook found of the 37 managers surveyed, 22 per cent were bullish on holding cash, compared with eight per cent in the June quarter. The researchers attributed the change to the Reserve Bank of Australia’s decision not to lower interest rates further.

Scott Bennett, Associate Portfolio Manager at Russell, said the outlook for almost all investment sectors had strengthened, with sentiment towards Australian equities at its highest level since the survey was started in 2005.  He said managers seemed to think the worst was over for markets and the economy.

“This quarter reflected a robust outlook for Australia and there is a resounding belief the Australian market is coming out in front.”

Highlights of the survey, which was conducted between August 27 and September 7, were:

- 65 per cent of managers were optimistic about Australian shares, up slightly from 63 per cent last quarter.

- Support fell for international shares and Australian property trusts (A-REITS) and Australian bonds remained the least supported asset class.

- 55 per cent said the Australian dollar could strengthen further against the US dollar.
- Only 8 per cent thought the stock market could fall further.  One in three said the market was undervalued and none of them said it was overvalued.
Mr Bennett said managers saw industrials, consumer discretionary and financials stocks as the most promising equity investments and were bearish on the “expensive defensives” such as telcos and utilities.

“Risk aversion has all but disappeared, with the majority of managers supporting the belief that Australia is more resilient than its larger counterparts. This view stems mainly from confidence in Australia’s banking system and Australia’s considerable reliance on growth from China,” he said.





Tags: australia , fund manager , fund manager