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.


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