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Investors braced for below trend growth, low inflation in 2012: BofA Survey

Investors are looking to US equities as they prepare themselves for a year of low growth and low inflation in 2012, according to the BofA Merrill Lynch Survey.

The survey of 190 institutional investors indicates almost two-thirds of the panel, predict 2012 will be a year of below-trend growth and below-trend inflation, the highest such reading since October 2010.

Investors are responding to the weak outlook with a preference for US and Emerging Market equities while the negative stance towards the eurozone hardens.

According to the survey, a net 50% of the panel says that the outlook for corporate profits is the most favorable in the US – up from a net 47% last month.

The survey reveals that a net 72%, name the eurozone as having the least favorable outlook for corporate profits.

Investors have also expressed a view that the dollar will strengthen and the euro weaken in 2012.

BofA Merrill Lynch Global Research head of European Equities strategy Gary Baker said that investors are slightly more optimistic about equities but retain a defensive approach, so that means reduced European exposure and a preference for counter-cyclical stocks.