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FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
A1 In which one of the following geographic regions do you live?
A2 Are you a...
A3 Are you involved in global asset allocation?
A4 Which ONE of the following best describes the type of money you are
running?
A5 What do you estimate to be the total current value of assets under your
direct control (US$)?
A6 Which of the following comes closest to your current cash position in your
portfolio?
A7 Please indicate whether your cash position is overweight, underweight or
neutral relative to your benchmark:
A8 What best describes your investment time horizon at this moment?
A9 Is your current investment time horizon longer or shorter than normal?
A10 What level of risk do you think you're currently taking in your investment
strategy / portfolio, relative to your benchmark?
A11 In 12 months' time, do you think that equity market volatility as tracked by
the VIX index will be…?
A12 How likely do you think it is that world stock markets will be lower in six
months' time?
A13 Your answer to the following question will determine which set of
questions you are asked. We don’t want to burden you with questions that are
not applicable, so please consider your answer carefully. Which one of the
following best describes you?
C1 At this time, in which phase of the economic cycle would you say the
global economy is?
C2 How do you think the global economy will develop over the next 12
months?
C3 How likely do you think it is that the global economy will experience
recession (i.e. two quarters of negative real GDP growth) over the next twelve
months?
C4 At this time, do you think the global economy is operating …
C5 In 12 months' time, do you think the global core consumer price inflation
rate (in year-on-year terms) will be...?
C6 Do you think that global monetary policy is currently…?
C7 In 12 months’ time, do you think yield curves (i.e. 10-year minus 3-month
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
rates) around the world will...?
C8 In 12 months' time, will global short-term interest rates (i.e. 3-month rates)
be...?
C9 In 12 months’ time, will global long-term interest rates (i.e. 10-year rates)
be…?
C10 Do you think that global bond markets are currently...?
C11 Over the next 12 months, do you think the outlook for corporate profits
worldwide will…?
C12 How likely do you think it is that global corporate earnings will rise 10% or
more over the next 12 months?
C13 What do you see as the MOST positive contributor to global corporate
earnings over the next 12 months?
C14 Over the next 12 months, do you think corporate operating margins
will…?
C15 Generally speaking, do you think companies are currently...?
C16 Generally speaking, do you think that corporate balance sheets are
currently...?
C17 Generally speaking, do you think payout ratios (including share
buybacks) are currently…?
C18 What would you MOST like to see companies do with their cash flow at
the current time?
C19 Do you think that global equity markets are currently...?
C20 What equity risk premium are you using at this time to assess equity
valuations?
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A1 In which one of the following geographic regions do
you live?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Only
Global
View
US / North
America
18%
18%
8%
18%
48%
13%
17%
Nordic
Countries
(Denmark,
Norway,
Sweden,
Finland)
9%
3%
1%
7%
0%
2%
5%
Switzerland
10%
7%
1%
9%
0%
4%
6%
4%
13%
9%
7%
0%
11%
7%
Continental
Europe
(other than
Nordic
Countries,
Switzerland,
Germany)
18%
15%
9%
17%
14%
12%
15%
UK
25%
18%
21%
22%
29%
20%
22%
Japan
12%
10%
28%
11%
0%
20%
15%
Asia Pacific
ex. Japan
(including
Australia)
2%
4%
10%
3%
10%
8%
5%
South Africa
0%
13%
12%
4%
0%
12%
6%
Rest of
World
2%
0%
0%
1%
0%
0%
1%
Germany
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A2 Are you a...
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Chief
Investment
Officer
12%
21%
13%
15%
5%
16%
14%
Asset
Allocator /
Strategist /
Economist
45%
22%
6%
37%
19%
13%
28%
Portfolio
Manager
37%
49%
70%
41%
71%
60%
51%
6%
8%
12%
7%
5%
10%
8%
Other
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A3 Are you involved in global asset allocation?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Yes
87%
46%
8%
73%
33%
25%
53%
No
13%
54%
92%
27%
67%
75%
47%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A4 Which ONE of the following best describes the type of
money you are running?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Institutional
funds (e.g.
pension
funds /
insurance
companies)
52%
39%
41%
48%
48%
40%
46%
Hedge
funds /
proprietary
trading
desks
7%
19%
12%
11%
19%
15%
12%
Mutual
funds / unit
trusts /
investment
trusts
25%
29%
43%
26%
29%
37%
31%
None of the
above
16%
13%
5%
15%
5%
8%
12%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A5 What do you estimate to be the total current value of
assets under your direct control (US$)?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
No
funds
under
my
direct
control
18%
14%
13%
17%
19%
13%
16%
Up to
$250mn
11%
18%
13%
14%
19%
15%
14%
Around
$500mn
10%
11%
19%
10%
5%
15%
12%
Around
$1bn
15%
18%
26%
16%
29%
22%
19%
Around
$2.5bn
7%
14%
6%
9%
19%
10%
9%
Around
$5bn
10%
6%
10%
8%
5%
8%
9%
Around
$7.5bn
5%
4%
5%
5%
0%
4%
4%
Around
$10bn
or more
23%
14%
9%
20%
5%
11%
16%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A6 Which of the following comes closest to your current
cash position in your portfolio?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
0%
20%
21%
36%
20%
35%
29%
25%
2%
36%
24%
26%
32%
53%
25%
32%
4%
15%
19%
17%
16%
0%
18%
16%
6%
8%
7%
4%
7%
0%
5%
6%
8%
4%
3%
3%
4%
0%
3%
3%
10%
6%
7%
7%
6%
0%
7%
6%
12%
or
more
6%
12%
4%
8%
0%
7%
6%
Don't
know
6%
7%
4%
6%
12%
5%
6%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A7 Please indicate whether your cash position is
overweight, underweight or neutral relative to your benchmark:
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Overweight
30%
41%
24%
34%
18%
31%
30%
Underweight
15%
14%
7%
15%
24%
10%
13%
Neutral
45%
33%
50%
42%
41%
43%
44%
9%
12%
20%
10%
18%
16%
13%
Don't know /
Not
applicable
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A8 What best describes your investment time horizon at
this moment?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
3
months
or less
24%
28%
21%
25%
5%
24%
23%
6
months
22%
25%
24%
23%
19%
25%
23%
9
months
11%
14%
8%
12%
29%
11%
12%
12
months
or
more
37%
29%
43%
35%
43%
37%
37%
6%
4%
3%
6%
5%
4%
5%
Don't
know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A9 Is your current investment time horizon longer or
shorter than normal?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Longer
than
normal
2%
1%
7%
2%
5%
4%
3%
Normal
70%
61%
67%
67%
81%
65%
68%
Shorter
than
normal
26%
33%
20%
29%
10%
26%
25%
2%
4%
6%
3%
5%
5%
4%
Don't
know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A10 What level of risk do you think you're currently
taking in your investment strategy / portfolio, relative to your
benchmark?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Only
Global
View
Higher
than
normal
15%
17%
10%
15%
10%
13%
14%
Normal
55%
56%
52%
55%
52%
54%
54%
Lower
than
normal
28%
24%
33%
27%
24%
28%
28%
2%
4%
5%
3%
14%
4%
4%
Don't
know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A11 In 12 months' time, do you think that equity market
volatility as tracked by the VIX index will be…?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
A lot higher
11%
7%
5%
9%
19%
6%
9%
Slightly
higher
68%
63%
63%
66%
52%
63%
64%
Unchanged
15%
15%
19%
15%
14%
17%
16%
Slightly
lower
4%
11%
12%
7%
5%
11%
8%
A lot lower
1%
0%
1%
0%
0%
1%
1%
Don’t know
1%
4%
1%
2%
10%
3%
2%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A12 How likely do you think it is that world stock markets
will be lower in six months' time?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
Very
likely
6%
3%
3%
5%
5%
3%
4%
Fairly
likely
32%
28%
43%
30%
38%
36%
34%
Fairly
unlikely
50%
50%
40%
50%
43%
44%
47%
Very
unlikely
8%
8%
3%
8%
5%
6%
7%
Don't
know
4%
11%
10%
7%
10%
11%
8%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » A13 Your answer to the following question will determine
which set of questions you are asked. We don’t want to burden you with
questions that are not applicable, so please consider your answer
carefully. Which one of the following best describes you?
Breakdown
Regional
Global
Specialists Regional
Global GEM
Regional Grand
Specialists with a
Specialists
Total Specialists Total
Total
Only
Global
Only
View
I am a
global
specialist. I
follow all
the major
global
markets. I
am often
involved in
global
strategy
and asset
allocation.
92%
0%
0%
61%
0%
0%
41%
I have a
global
perspective
but I also
specialise
in a
specific
region of
the world. I
tend to
look at my
region in a
global
context.
1%
100%
0%
34%
0%
46%
23%
I purely
specialise
in a
specific
region of
the world. I
2%
0%
100%
1%
0%
54%
28%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
have only a
limited
knowledge
/ interest
about what
is
happening
outside my
region.
I specialise
in global
emerging
market
equities.
0%
0%
0%
0%
100%
0%
7%
None of
the above.
5%
0%
0%
3%
0%
0%
2%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C1 At this time, in which phase of the economic cycle
would you say the global economy is?
Breakdown
Global Specialists
Only
Earlycycle
Regional Specialists with a
Global View
Global
Total
0%
0%
0%
Mid-cycle
35%
42%
37%
Late-cycle
65%
56%
62%
Recession
0%
0%
0%
Don't
know
1%
3%
1%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C2 How do you think the global economy will develop
over the next 12 months?
Breakdown
Global Specialists Regional Specialists with a
Only
Global View
Get a lot
stronger
Global
Total
1%
1%
1%
Get a little
stronger
23%
21%
22%
Stay the same
20%
32%
24%
Get a little
weaker
50%
46%
49%
Get a lot
weaker
6%
0%
4%
Don't know
1%
0%
0%
0
0
0
Average
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C3 How likely do you think it is that the global economy
will experience recession (i.e. two quarters of negative real GDP growth)
over the next twelve months?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Very likely
1%
0%
0%
Fairly likely
8%
3%
6%
Fairly
unlikely
54%
49%
52%
Very
unlikely
37%
49%
41%
1%
0%
0%
0
0
0
Don't know
Average
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C4 At this time, do you think the global economy is
operating …
Breakdown
Global
Specialists
Only
Regional
Specialists with a
Global View
Global
Total
With a positive output gap (i.e.
output above its long-term
sustainable growth path)
22%
33%
26%
With a negative output gap (i.e.
output below its long-term
sustainable growth path)
25%
17%
22%
With a zero output gap (i.e.
output in line with its long-term
sustainable growth path)
47%
35%
43%
6%
15%
9%
Don't know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C5 In 12 months' time, do you think the global core
consumer price inflation rate (in year-on-year terms) will be...?
Breakdown
Global Specialists
Only
A lot higher
Regional Specialists with a
Global View
Global
Total
1%
0%
0%
Slightly
higher
43%
53%
46%
Unchanged
33%
32%
33%
Slightly lower
22%
15%
20%
A lot lower
0%
0%
0%
Don't know
1%
0%
1%
0
0
0
Average
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C6 Do you think that global monetary policy is
currently…?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Too
restrictive
7%
0%
5%
About right
70%
81%
74%
Too
stimulative
20%
18%
19%
Don't know
3%
1%
2%
0
0
0
Average
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C7 In 12 months’ time, do you think yield curves (i.e. 10year minus 3-month rates) around the world will...?
Breakdown
Global
Regional Specialists
Specialists Only with a Global View
Global
Total
Flatten (become more
negatively sloped)
15%
22%
18%
Steepen (become more
positively sloped)
63%
53%
60%
Remain the same
18%
19%
18%
4%
6%
4%
Don’t know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C8 In 12 months' time, will global short-term interest rates
(i.e. 3-month rates) be...?
Breakdown
Global Specialists
Only
A lot higher
Regional Specialists with a
Global View
Global
Total
0%
0%
0%
Slightly
higher
45%
40%
43%
Unchanged
23%
24%
23%
Slightly lower
29%
32%
30%
A lot lower
2%
0%
1%
Don't know
1%
4%
2%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C9 In 12 months’ time, will global long-term interest rates
(i.e. 10-year rates) be…?
Breakdown
Global Specialists
Only
A lot higher
Regional Specialists with a
Global View
Global
Total
5%
7%
6%
Slightly
higher
58%
44%
54%
Unchanged
23%
31%
26%
Slightly lower
10%
14%
11%
A lot lower
2%
0%
1%
Don't know
1%
4%
2%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C10 Do you think that global bond markets are
currently...?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Overvalued
61%
42%
54%
Fairly valued
34%
47%
38%
Undervalued
4%
7%
5%
Don't know
2%
4%
3%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C11 Over the next 12 months, do you think the outlook for
corporate profits worldwide will…?
Breakdown
Global Specialists Regional Specialists with a
Only
Global View
Global
Total
Improve strongly
1%
0%
0%
Improve slightly
18%
24%
20%
Remain
unchanged
16%
25%
19%
Deteriorate
slightly
60%
47%
56%
Deteriorate
strongly
4%
1%
3%
Don't know
1%
3%
2%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C12 How likely do you think it is that global corporate
earnings will rise 10% or more over the next 12 months?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Very likely
0%
3%
1%
Fairly likely
25%
22%
24%
Fairly
unlikely
60%
61%
60%
Very
unlikely
13%
7%
11%
2%
7%
4%
Don't know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C13 What do you see as the MOST positive contributor to
global corporate earnings over the next 12 months?
Breakdown
Global Specialists Regional Specialists with a
Only
Global View
Global
Total
Higher volumes
35%
32%
34%
Higher selling
prices
24%
26%
25%
Lower costs
30%
31%
30%
Don't know
12%
11%
12%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C14 Over the next 12 months, do you think corporate
operating margins will…?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Increase
6%
11%
8%
Decrease
61%
40%
54%
Stay the
same
27%
43%
33%
6%
6%
6%
Don’t know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C15 Generally speaking, do you think companies are
currently...?
Breakdown
Global
Specialists
Only
Over-investing in their
businesses (too much
capex)
Regional Specialists
with a Global View
Global
Total
4%
3%
4%
Under-investing in their
businesses (too little capex)
50%
56%
52%
Investing appropriately
38%
35%
37%
8%
7%
7%
Don't know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C16 Generally speaking, do you think that corporate
balance sheets are currently...?
Breakdown
Global Specialists Regional Specialists with a Global
Only
Global View
Total
Over-leveraged
5%
4%
5%
Under-leveraged
57%
71%
62%
Appropriately
leveraged
32%
19%
28%
6%
6%
6%
Don’t know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C17 Generally speaking, do you think payout ratios
(including share buybacks) are currently…?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Too high
8%
10%
8%
Too low
39%
42%
40%
About
right
46%
44%
46%
Don't
know
7%
4%
6%
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C18 What would you MOST like to see companies do with
their cash flow at the current time?
Breakdown
Global
Specialists
Only
Regional
Global
Specialists with a
Total
Global View
Increase capital spending
37%
42%
38%
Improve balance sheets (e.g.
repay debt, address pension
liabilities)
11%
8%
10%
Return cash to shareholders
(share buybacks / dividend
payments / cash- or debt-financed
M&A)
46%
46%
46%
6%
4%
6%
Don't know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C19 Do you think that global equity markets are
currently...?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
Overvalued
15%
11%
14%
Fairly valued
67%
64%
66%
Undervalued
15%
24%
18%
3%
1%
2%
Don't know
FUND MANAGER SURVEY April 2007
Conducted on behalf of MERRILL LYNCH
Global PDF » C20 What equity risk premium are you using at this time
to assess equity valuations?
Breakdown
Global Specialists
Only
Regional Specialists with a
Global View
Global
Total
1% or less
0%
0%
0%
1.5%
1%
0%
0%
2%
0%
4%
1%
2.5%
8%
6%
7%
3%
22%
15%
20%
3.5%
22%
26%
23%
4%
17%
15%
16%
4.5%
7%
6%
7%
5% or
higher
6%
8%
7%
18%
19%
18%
Don’t know