Most European fund managers expect stronger economic growth in the euro zone over the next 12 months and said the region's equities were cheap, a monthly poll by Merrill Lynch reported today.
The fund managers, polled between June 5th and 12th, also cut their average cash holdings to the lowest levels in more than four years, the Merrill survey found.
European fund managers cut their average cash holdings to 3.2 per cent in June from 4.6 per cent in May.
A net 64 per cent of European fund managers said they saw stronger euro zone growth in the next 12 months, up from 46 per cent in May. A net 31 per cent said they saw lower inflation ahead, compared to just two per cent a month earlier.
Although the European fund managers surveyed thought the region's growth prospects would improve, nearly half of all the 270 managers surveyed worldwide thought the euro zone had the worst relative profit outlook of any region, said Mr Michael Hartnett, analyst at Merrill Lynch.
Some 49 per cent of global funds thought the euro zone had the worst prospects for corporate profits, up from 36 per cent in May.