Fund managers neutral to bearish over short term: Survey

Equity fund managers are cautious about equity markets and have a neutral to bearish view over the shorter term, finds the latest fund manager survey conducted by ICICI Securities of 16 top mutual fund managers.

While at this juncture fund managers believe the equity markets are ‘fairly valued,’ they remained concerned about higher crude oil prices and monetary tightening, said the report. More than 60% of respondents believed that equity will be in the range of +/- 10% till the end of calendar year 2011 from current levels. About 38% of the respondents remained optimistic, expecting equity markets to deliver returns in the range of 10-20% this year.

On the valuation front, while most of the fund managers believed that Indian equity markets are not expensive, they also believed it is neither very cheap given the current macro economic environment. Majority of the participants advised investors to maintain the asset allocation rather than increasing allocation to equity markets at current levels.

Also more than 60% of the fund managers believed that midcaps may be a better investment option with an investment horizon of one year.

With respect to corporate profit growth expectations, it is showing signs of moderation, felt the fund managers. 44% of the fund managers believed that profit growth may drop in the range of 10-15% for FY11-12, far less than earlier expectation of the market. However, consensus for higher growth in FY12-13 remains, the report said.

Pharma and IT are the most preferred sectors and the level of crude oil prices remain a major concern for most of the fund managers.

Although short-term outlook remains bearish for Indian equity markets, majority of the participants believe that the equity market is expected to recover to outperform other asset classes in the rest of the calendar year 2011.

Source: http://www.financialexpress.com/news/Fund-managers-neutral-to-bearish-over-short-term--Survey/795030/#