- Fund managers more uncertain about market outlook - Defensive assets favoured over growth assets - Managers still relatively bullish on Australian equities - Australian dollar expected to fall in coming years

By Chris Shaw

Global equity markets weakened in the June quarter, Russell Investments attributing this to ongoing political tensions in the Middle East and North Africa, continued European sovereign debt concerns, inflationary pressures in emerging markets and signs of a mid-cycle slowdown in the US.

In Australia there was the additional concern tighter monetary policy in China would impact on demand for Australian resources, while the stronger Australian dollar was also seen as an issue with respect to earnings for a number of companies.

In response to the June quarter performance, Russell Investments has surveyed fund managers to see how they are responding to current market conditions and where they identify opportunities going forward.

According to Greg Liddell, Russell Investments' director of