BAML survey shows asset managers worried over China falling into recession

Bank of America Merrill Lynch (BAML) survey shows investors are worried over further slowdown in China and debt crisis in emerging markets. BAML surveyed 214 fund managers with $593 billion assets under management.

While investors have long been positioning for a slowdown in China, recent financial market turmoil over China's devaluation of Yuan has seriously dented confidence. Investors are now fearful over recession in China.

• Over the past one month, net equity over weights are down 24%, while investors extended commodity shorts.
• Things are more intensified for emerging markets. Net underweights are at record low of 34%, with aggressive underweights at record high.
• Fund managers are holding cash at level of 5.5%, not seen since 2008 crisis.
• Perception of liquidity conditions are seen at lowest level in three years.

Investors fear, recession in China in 2016.