Many stock indices around the world are at record highs or are close to them.

On Wednesday, for example, the Dax peaked at 16,284 points at times - an increase of 19 percent since the beginning of the year.

At the same time, the environment is shaped by fears of inflation and pandemic concerns, among other things.

The number of people infected with corona is growing rapidly in many countries.

Nevertheless, institutional investors are currently more confident than they were a month ago.

Kerstin Papon

Editor in business.

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At least that is what a Bank of America survey of 388 fund managers who manage assets of around $ 1.1 trillion worldwide found.

According to this, for example, the proportion of liquid funds in the portfolios of the respondents fell from an average of 4.7 percent in pessimistic (“bearish”) October to 4.4 percent in November.

For comparison: a value of more than 5 stands for fear of investors, a value of less than 4 for greed.

In addition, the respondents show a greater appetite for risk at the end of the year.

The overweighting of American stocks in their portfolios has risen to its highest level since 2013.

A net 29 percent of fund managers - the proportion of optimists exceeds that of pessimists by this figure - overweight these papers, an increase of 13 percentage points on the previous month.

More growth expected

The expectations for global economic growth have stabilized and improved. Two thirds of those surveyed expect an upswing in the next twelve months and only 6 percent expect a recession. In view of the past strong reporting season for many companies in the third quarter, profit expectations for companies have also increased, according to Bank of America. In October, the majority of those surveyed had expected declining profits.

The fund managers surveyed are clearly betting on rising share prices, especially in Europe and America. In detail, they favor banks and technology companies, they also find raw materials or health papers interesting. Investors, on the other hand, avoid defensive stocks such as utilities or non-cyclical consumer stocks among the sectors. Bonds are particularly unpopular. The bottom line is that they overweight investments that should benefit from inflation and invest below average in those that are perceived as vulnerable to more restrictive monetary policy by central banks, such as bonds, but also emerging markets.

Inflation (33 percent of those surveyed) and a more restrictive monetary policy (22) are cited as the greatest market risks, but both are less common than in October.

This is followed by China (20), previously in second place, the formation of price bubbles (16) and Corona (5).

Almost two thirds of the fund managers expect inflation to be temporary.

And which asset class should bring the best returns in 2022?

34 percent of those surveyed named emerging market stocks, 30 percent the American S&P 500 index, followed by Bitcoin (12) as well as gold and oil (10 each).

The survey took place last week.