SINGAPORE: Fund managers have turned more guarded about the economic and investment outlook compared to six months ago, according to the latest poll of fund managers by OCBC Bank.

The survey showed that fund managers expect economic growth to be sluggish at least for the rest of this year and possibly next year.

They felt that the US sub-prime crisis is not over and its economic impact will be felt in the coming months.

Respondents were also concerned that corporate earnings expectations may be too high and have warned that earnings downgrades could weigh on equity markets in the coming months.

The poll found that with the uncertain economic and earnings outlook, fund managers who were mostly positive on equities six months ago, have now turned cautious about the asset class.

They are citing key risks such as inflation, cost pressures and volatility in commodity markets.

However, fund managers said they are still seeing selective investment opportunities in some areas, including commodities, precious metals and infrastructure.

OCBC's poll surveyed 15 local and international fund managers on the investment outlook for the financial markets in the second half of this year. - CNA/vm