Findings from the BofA Merrill Lynch Survey of Fund Managers for March showed that more than a fifth of asset allocators are underweight in European equities.
Up to 40 per cent of global investors questioned described the outlook for corporate profits in the eurozone as the least optimistic out of all the territories.
In the regional part of the study, the number of European fund managers anticipating growth in their home economy has fallen from 72 per cent to below half since February.
Gary Baker, head of European Equities strategy at BofA Merrill Lynch Research, said: âInvestors' concerns about Greece are easing, but European country risk remains a key constraint to optimism over economic recovery.â
Michael Hartnett, chief Global Equities strategist at BofA Merrill Lynch Research, added: âInvestors are more willing to embrace corporate risk, via equities, than sovereign risk.â
Further findings from the research showed that 85 per cent of respondents from within the eurozone have ruled out an increase in interest rates by the European Central Bank.
Over 200 fund managers were questioned by researchers as part of the global side to the survey.
By Jim Ottewill