BoF Survey Fund managers allocations to emerging markets equities at its lowest point since December 2008

From Reuters

"The survey, which polled 248 managers with $708 billion in assets, found that a net 25 percent placed emerging markets as the region they would most like to underweight in the coming 12 months, the lowest ever reading.

Last week, emerging markets stocks posted their fifth straight week of losses''.

''The fears over China come after a Reuters poll on Tuesday signaled more optimism among equity analysts, and Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, reckoned the survey response looked overdone''.

"The lows in emerging market equity and commodity allocations suggest the market has over-positioned itself for a shock from China," he said. China was considered the greatest tail risk among those polled, followed by a potential failure of stimulus measures in Japan.

ast week, emerging markets stocks posted their fifth straight week of losses.

The fears over China come after a Reuters poll on Tuesday signaled more optimism among equity analysts, and Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, reckoned the survey response looked overdone.

"The lows in emerging market equity and commodity allocations suggest the market has over-positioned itself for a shock from China," he said. China was considered the greatest tail risk among those polled, followed by a potential failure of stimulus measures in Japan.

Allocations to commodities reached a record low with a net 32 percent of those surveyed holding underweight positions.

Manish Kabra, equity strategist at Bank of America Merrill Lynch, outlined the implications of what looks like a disconnect.

"It's the sentiment that is running out of anything that is linked to emerging market or thecommodity cycle. If China actually surprises on the upside in the coming months there is a big bounce ready to come,"