Fund managers' allocations to euro zone equities have hit pre-crisis levels, amid a rapid shift in sentiment towards the region, according to a survey by Bank of America (BofA) Merrill Lynch.
The bank's fund manager survey for September revealed that investors' bullishness towards Europe had offset a continuing sell-off of emerging markets, which have been slammed by uncertainty over the tapering of the U.S. Federal Reserves' stimulus program.
According to the report, published on Tuesday, allocations to euro zone stocks reached their highest level in September since May 2007. Some 36 percent of global asset allocators were overweight Europe — more than twice August's 17 percent.
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Fund managers were bullish on Britain in particular, given the string of positive data to come out of the country over the last month. In an all-time high for the survey, 12 percent of allocators were overweight on U.K. stocks.
BofA Merrill Lynch stressed that the switch in sentiment towards Europe has been swift. The bank's European investment strategist, John Bilton, described investors' belief in Europe's economy as "robust".
Data released on Tuesday showed better-than-expected rises in euro zone business sentiment, the latest in a series of positive economic indicators since continental Europe emerged from its longest recession in over 40 years.
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