BRASILIA, Feb 18 (Reuters) – Slowing economic growth and commodities demand in China is by far the biggest single worry among Latin American fund managers, who are now holding the largest cash position in their portfolios in two years, a Bank of America Merrill Lynch (BAML) survey showed on Tuesday.
Some 56% of those surveyed cited this as their No. 1 overseas risk for Latin American markets, up from 12% last month and far ahead of U.S. elections (15%) and a strong U.S. dollar (just over 10%).
The Bank of America Merrill lynch survey of 52 fund managers with approximately $103 billion of assets under management was carried out from Feb. 6 to Feb. 13.
Reflecting the greater degree of risk aversion, their average cash position shot up to 5.2% from under 3.0% in January, the highest since BAML began the Latin American fund manager survey two years ago, the bank said.
Regarding Brazil, almost half of the fund managers surveyed said they would be disappointed if economic growth this year fails to reach 2.0%, and 90% said they would be disappointed if it doesn’t reach 1.5%.
Several banks have recently downgraded their 2020 growth forecasts toward the 2.0% mark.
Among the survey’s other notable findings, 60% see the economic situation in Argentina deteriorating in the next six months, up from 55% last month, while 27% think the same about Chile, up from only 8% in January.
More than a fifth of those surveyed now expect the Mexican peso to outperform over the coming six months, up from 4% last month, BAML said. (Reporting by Jamie McGeever; editing by Jonathan Oatis)
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