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The big money's still bullish on stocks, bearish on bonds

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Some of the largest investment managers in the world are still bullish on stocks and economic growth, but worry governments might get in the way.

Professional services company Towers Watson surveyed 128 investment managers—a majority having at least $5 billion under management—over November and December of 2013 as part of an annual investing forecast.

Generally, the fund managers were optimistic about the prospects for equity returns and short-term economic growth in most markets. But they were concerned about longer-term world growth and medium-term government bonds, according to the findings released Monday.

The biggest challenges, the hedge, mutual and other fund managers said, come from the public sector: government intervention, inflation, global economic imbalances and financial instability.

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"It is not surprising that managers have expressed such unease at developed market governmental intervention, including monetary, fiscal, legislative and regulatory measures—given the impact such developments as QE tapering, fiscal spending going into sequestration and the Volker Rule have had on global markets," Matt Stroud, Towers Watson's head of investment strategy for the Americas, said in a statement.

"The knock-on effects from some of these interventions, particularly QE tapering on some fragile emerging markets and the Volker Rule's impact on certain over-the-counter markets—such as the corporate bond market—have been significant," added Stroud, who wrote the report with Jason Shapiro and Ben Webb.

Most of the money managers surveyed expected continued gains in global stock markets in 2014. They were also optimistic over five years on emerging market equities. Predictions for gross domestic product growth were also generally positive in 2014.

Investing gain predictions for 2014

Market Stocks 10Y Govt bonds GDP

Most were also bearish over five years on government, investment grade and high yield bonds.

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Towers' manager predictions in the same survey in February 2013 were broadly correct—if overly cautious.

Fund managers were optimistic about equity returns and relatively negative on world growth and medium-term government bonds.

The Towers survey predicted, for example, a seven percent gain by U.S.stocks over the year. The S&P 500 index gained 29 percent in 2013. The managers also predicted real U.S. GDP growth of 2.0 percent in 2013; GDP ended up rising 2.7 percent, according to the U.S. Department of Commerce.

—By CNBC's Lawrence Delevingne. Follow him on Twitter @ldelevingne.