Investors across the globe are optimistic about 2010, with 80 per cent of respondents to a recent survey expecting the world economy to grow over the next 12 months.

The BofA Merill Lynch Survey of Fund Managers for December also revealed that two thirds of investors expect equity markets to return to traditional growth levels or better; while expectations for corporate profits are at their highest level since December 2003.

Investors are subdued when it comes to interest rate concerns, with a growing proportion not expecting interest rate hikes from the Fed before the second half of the year.

Michael Hartnett, chief global equity strategist at BofA Merrill Lynch Global Research, commenting on the results, said investors were "nervous but optimistic heading into the New Year" with respondents looking for a 7.7 per cent total return from global equity markets.

This optimism is also reflected in investors' choice of assets, with European investors starting to move into riskier assets after months sticking with defensive equities.

Share Story: