Fund managers are now more optimistic on the global economic outlook compared to six months ago.
However, they are concerned that the growth momentum could ease during the second half of the year, as government stimulus begins to be withdrawn, according to a poll of 19 fund managers conducted by OCBC Wealth Management.
While fund managers are more concerned about the outlook, they said the US economic rebound and emerging markets are a silver lining.
The poll indicated that almost all fund managers are positive about the outlook for equities in the medium to long term, adding that it is still their preferred asset class.
Despite concerns on the economy and signs of tightening in China, majority of the fund managers are now positive on Chinese equities.
Money managers also said those with a medium term horizon must find selective opportunities within markets.
Equity markets such as US equities, Asia ex-Japan and Emerging Markets are favoured by fund managers. However, they cautioned that with risks and uncertainties looming on the horizon, investors should not throw caution to the wind.
The respondents recommended diversification and periodic investments as strategies that investors should consider, especially in the current volatile situation for markets.
They cited sovereign debt problems in developed markets, the development of asset bubbles in China and inflation as key risks.
The poll indicated that fund managers are mostly positive on the outlook on gold but mixed on commodities in the short term.
However, despite the risks, respondents said investors must not lose sight of the longer term.