Investors Stick With Stocks as Hedge Funds Borrow, Merrill Says

Equities remained the asset class of choice for investors this month as hedge funds raised the level of borrowed money invested in stocks to a 3 1/2-year high, a BofA Merrill Lynch Global Research survey showed.

A net 41 percent of 284 respondents, who together manage $814 billion, were “overweight” equities. That compares with 50 percent in April. A net 44 percent were “underweight” bonds in May, 6 percent overweight cash and 12 percent overweight commodities, which halved from April. An index of risk appetite slipped to 43 from 45, though remained above the long-term average of 40, the brokerage said.