Global emerging-market (GEM) investors have kept their country weightings relatively steady in the past month, but the same cannot be said for Asia-Pacific ex-Japan punters, according to Bank of America Merrill Lynch's April fund manager survey.

The latter group has undergone some big swings in sentiment, from a net 5% of them being overweight Australia in March shifting to around a net 20% underweight this month. Malaysia and New Zealand have also fared badly, with the net number of Asia-Pacific investors underweight both countries substantially increasing, to around 18% and 14% respectively.

On the other hand, close to a net 15% are overweight Indonesia (up from around 3% last month) and both Taiwan and Thailand have swung from being net underweight to around 11% and 7% overweight respectively.

In terms of sectors, the big winner among Asia-Pacific and GEM investors is technology, with both groups substantially increasing their allocations to the sector.

Among global investors, Japan is gaining favour at the expense of the eurozone, as questions surrounding Greek government debt intensify. A net 12% of global asset allocators are overweight Japanese equities, the highest level since July 2007 and up from 6% last month. In February, asset allocators had been net underweight the country. A net 18% are underweight eurozone equities.

Investors are more positive about the outlook for Japanese corporates. A small majority (net 3%) of the global panel says Japanese companies have the most favourable outlook of all regions. That was previously a minority view (a net negative 4% in March). 

"As recently as five months ago investors regarded Europe as the most attractive play on global economic recovery," says Patrik Schowitz, European equity strategist at BoA Merrill Lynch Global Research. "But with the Greek debt crisis, Europe has become a no-go zone and asset allocators now view Japanese equities as a cleaner cyclical play."

European fund managers are more optimistic, however, with a net 62% expecting a stronger economy 12 months out, up from 45% last month, but still below January's 74%.

Meanwhile, belief in macroeconomic growth has increased globally. The number of investors taking "above normal" risk in their portfolios is at its highest since January 2006, and investors are more bullish about the ability of companies to increase profitability.

The number of respondents predicting the 'Goldilocks' scenario of above-trend growth and below-trend inflation has risen sharply to 32% from 21% in March, and fewer respondents are expecting below-trend growth. Inflationary fears remain subdued, and 42% of respondents expect no interest-rate hike from the US Federal Reserve before 2011, up from 38% last month.

Average cash balances have fallen to 3.5% of a portfolio from 3.8% in March. Around half (52%) of global investors are overweight equities, up from a third in February, and back to the level seen in January. Within equities, investors have scaled back their underweight positions on banks and raised exposure to cyclical stocks.

A total of 197 fund managers, managing a total of $546 billion, participated in the global survey from April 1-8. A total of 161 managers, managing $359 billion, participated in the regional (GEM and Asia-Pacific ex-Japan) surveys.