A revival in risk appetite continues apace, with no fund managers underweight equities in the second quarter of this year, finds a global HSBC survey.

Within that asset class, moreover, no managers are underweight Japan, Asia-Pacific ex-Japan, emerging markets, BRIC, Greater China and India.

The most bullish equity readings are for Greater China (60% overweight), EM and North America (both 57%) and Asia-Pacific ex-Japan (50%).

But while the equity overweights for western markets all fell from the first quarter, they increased for Japan, Asia-Pacific ex-Japan, emerging markets and Greater China.

“Emerging markets equities, including Asia equities, continue to be attractive as a result of better fundamentals,” says Vineet Vohra, HSBC’s regional head of wealth development for Asia Pacific.

However, he notes that some managers have turned cautious due to renewed concerns over the eurozone debt crisis.

On the debt side, no managers were underweight Asian local currency bonds or global emerging markets, and they were heavily overweight in the two categories (75% and 71%, respectively) as well as high yield (71%).

This is evidently a view on the region’s strong fundamentals as well as currency appreciation potential.

With the US dollar under pressure from the Federal Reserve’s continued support for quantitative easing, four in five fund managers are underweight US dollar bonds and none of them holds an overweight view towards the asset class.

In terms of flows in the fourth quarter of 2012, bond funds accounted for 40% of FUM growth, or around $50 billion of a total of $124 billion across the 10 global fund houses polled.

Bond funds also recorded the second largest net inflow since 2008, totaling $55.9 billion, of which Asian bonds grew 11%.

Equity funds, meanwhile, saw a net outflow of $13.4 billion in the final three months of last year – the 10th consecutive quarter – as investor concerns over the European debt crisis and US fiscal talks remained.

The least favoured strategy was Greater China equity, which saw an overwhelming net redemption of 17.2%, and that after a 5.2% redemption in the previous quarter.

Yet Greater China equities were the best performer in the fourth quarter with a 12.9% rise, followed by Europe including UK equities (+7%) and Asia-Pacific ex-Japan equities (+6%).

Vohra notes that Greater China equities suffered such a strong net outflow as investors took profit from the rally earlier in the quarter.

“Except for this emerging markets equities are generally in good shape and continue to attract inflows, with Asia-Pacific ex-Japan equity funds having net inflows for the first time since the third quarter of 2011, driven by its relatively resilient economics,” he adds.

On fixed income, Europe including UK bonds recorded 4.6% return and high-yield/emerging market bonds went up 3.9% as investors sought yield.

HSBC surveyed 10 partner fund managers accounting for 14.9% of global FUM: AllianceBernstein, Allianz Global Investors, BlackRock, Eastspring, Fidelity, Franklin Templeton, Invesco, JP Morgan AM, Pimco and Schroders.