Fund managers are less bullish about Chinese equities in the fourth quarter as the mainland economy is expected to worsen, according to the latest quarterly survey by HSBC. The survey, conducted among fund managers from 13 of the world's leading fund management houses, showed only 25 per cent of those surveyed rated Greater China equities as 'overweight', compared with 63 per cent in the third quarter. Those who put an 'underweight' on these equities or remained neutral, however, rose to 13 per cent and 63 per cent respectively from zero and 38 per cent a quarter earlier. 'The mainland's economy is expected to slow down in the coming months and this has influenced the views of many fund managers on Greater China,' said Bruno Lee, the head of Wealth Management Personal Financial Services in Hong Kong. More fund managers were bearish about equities from developed markets as their economies were heading for recession, Mr Lee said. The survey found that fund managers who underweighted equities from North America and Europe grew to 50 per cent in the fourth quarter from 44 per cent in the previous quarter. Those underweighting Japan's equities increased from 22 per cent in the third quarter to 33 per cent in the current quarter. Fifty-six per cent of fund managers, however, were 'overweight' on European bonds in the fourth quarter, compared with 22 per cent in the previous quarter, thanks to Europe's efforts to improve liquidity, market sentiment and growth, Mr Lee said. Despite their different views, half of the fund managers were bullish on equities in the fourth quarter, compared with 22 per cent a quarter earlier, because of the attractive valuations in most equity markets. But their views on bonds and cash were mixed as they remained cautious. The HSBC survey revealed that while fund managers overweighting bonds grew to 50 per cent from 44 per cent a quarter ago, those underweighting them also increased from zero to 20 per cent. On cash, 25 per cent were 'overweight' while 13 per cent underweighted it in the fourth quarter, compared with 38 per cent and zero in the previous quarter. The survey also showed that as market volatility continued and major economies moved into recession, funds under management of the managers surveyed recorded an estimated outflow of US$462 billion in the third quarter, the most since the survey was launched in 2006. Emerging markets' equities had recorded the biggest fund outflow, at 11.1 per cent, in the third quarter. US bonds however saw their biggest fund inflow, of 9.4 per cent, in the third quarter as investors continued to seek safe haven in US treasuries.