The US subprime crisis may have spilled over to the worldwide equity markets, but all is not lost with a new survey of fund managers from across the world indicating a major shift toward emerging markets.While fund managers have turned more risk averse in light of the global market instability, they believe equities still offer value, especially relative to bonds, according to Merrill Lynch's Fund Managers Survey for August.The survey indicated a shift away from the US with 29% respondents saying emerging markets offered the best corporate profit outlook of all regions overtaking the Eurozone, which has been the favoured region throughout 2007.Although the survey did not specifically mention India, the country is one of the major emerging economies. The country's stock market benchmark, Sensex, however, has fallen in line with the global trend in the past few days.Merrill Lynch said investors believed that the quality of earnings in emerging markets, while a concern, was improving although it was deteriorating in the US.The managers said valuations were seen as more attractive and fewer respondents believed emerging market equities to be the most overvalued. "Only a net 8% hold that view, while a net 19% see the US as the most overvalued region," it said.In the broadest snapshot of global institutional investor sentiment since the sharp rises in credit spreads and equity market volatility, 11% still regarded equities as undervalued, while 41% thought bonds are overvalued.A total of 181 fund managers, managing a total of $599 billion, participated in the global survey from August 2 to August 9.
