The West

Fund managers have moved a swag of cash into Australian equities in the past few months.
Fund managers have moved a swag of cash into Australian equities in the past few months.

Fund managers controlling high proportions of Australians' savings have shifted large amounts of money out of cash and bonds and into the sharemarket in recent months.

Global bank HSBC said 75 per cent of global fund managers in its latest Fund Managers survey were holding an overweight view towards equities in the first quarter of 2013 (compared to only 40 per cent in the final quarter of 2012).

Only 25 per cent had a neutral outlook (50 in Q4 12) and no fund manager was underweight on equities.

Despite Europe's sovereign debt crisis affecting the global economy last year, global equities rose and that has been offset by improving conditions in the world's largest economies: the US and China.

HSBC's Australia head of wealth management Mike Danby said fund managers were bullish about US and China equities for at least the first quarter of 2013 in the survey.

"Key data in the US and China is improving, in the US manufacturing is on the improve and we saw overnight that unemployment was down," he told AAP.

HSBC is predicting gross domestic product growth of 8.6 per cent for China in 2013, driven by the emerging middle class there.

Investors were embracing more risk again and chasing better returns after parking money in safe but low yield cash and bonds, he said.

The Australian market's ASX200 rose about 13 per cent in 2012.

Europe was an exception, where fund managers were 25 per cent underweight on equities, 25 per cent neutral and 50 per cent overweight, but the trend was still more optimistic.

While the size of Australia's share markets is small globally, its managed funds market is significant due to the use of superannuation contributions to invest in markets.

To illustrate the change in sentiment in the final quarter, the survey recorded a net outflow of $US13.2 billion ($A12.58 billion) for equity funds in the third quarter of 2012, the ninth consecutive quarter, as investors remained concerned about the fragile global economy.

The West Australian

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