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Beverly Chandler, Opalesque London: A BofA Merrill Lynch survey of global fund managers appears to show a change in sentiment from fund managers who now are less fearful of European sovereign risk than US fiscal issues and the upcoming election.

An overall total of 253 fund manager panellists, global and regional, with US$681 billion of assets under management participated in the survey from 7 September to 13 September. This the first time that the EU sovereign debt crisis is no longer the top tail risk identified by investors, for the first time since April 2011. The survey found that the proportion of the panel who most fear EU sovereign risk fell to 33% from 48% in August, while the U.S. fiscal cliff has become the biggest tail risk for 35% of global investors. "Investors now view the U.S. fiscal cliff as a greater threat than the eurozone – and the upcoming election is putting these fears into sharper focus," said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

Asset allocators have taken a small overweight position in eurozone equities for the first time since February 2011 when the eurozone sovereign crisis deepened, the survey found, with a net 1% of global asset allocators overweight the region compared with a net 12% underweight in August. In more good news for Eu......................

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