A new survey by Bank of America Securities-Merrill Lynch showed optimism among portfolio managers about the chances for global economic recovery rising to their highest level in nearly six years.

Three-quarters of the 204 fund managers polled in the monthly survey said they believe the world economy will strengthen over the next 12 months, the highest reading since November 2003.

About 63 per cent of managers polled in July had an upbeat view.

“Strong optimism in August represents a big turnaround from the apocalyptic bearishness of March,” Michael Hartnett, chief global equities strategist at Banc of America-Merrill Lynch Research, said in a statement.a

The positive views of fund managers has translated into more investments, as average cash balances fell to 3.5 per cent from 4.7 per cent in July, according to the survey.

A decline in cash balances is an indication that fund managers are moving that money into investments such as stocks or bonds.

However, despite the growing optimism about a global economic recovery, Hartnett said there is still a lack of certainty about how strong it will be.

About 80 per cent of investors are predicting below trend growth for the next year, he added.

Regionally, portfolio managers have been overweighting investments in emerging markets, while limiting exposure in the US, Britain, Europe and Japan, according to the survey results released Wednesday.

The technology sector remains the most popular with portfolio managers, with 28 per cent of respondents overweighting the industry.

Banks, which have been among the hardest hit by the credit crisis and ongoing recession, remain one of the least popular investments, with fund managers holding a 10 per cent underweight position on the sector.