Equities are the investment of choice in the first quarter of 2010 for fast-growing Asian markets, the latest quarterly Fund Managers Survey by HSBC reveals.

A good 75 per cent of the fund managers polled expressed optimism over equities in Greater China, from just 57 per cent in the previous quarter, while 70 per cent favoured Asia-Pacific ex-Japan equities. Half of the respondents had positive views on the equities market during the period, up from 33 per cent.

"We see appetite for equities returning as increased signs of economic recovery are evident in emerging markets. This trend is particularly true within Asia-Pacific where growth is forecast to be sustainable," said Jenny Lau, the manager of premier and wealth management for HSBC Brunei, in a press release.

"There is an opportunity for investors to diversify equity holdings as North American equities are starting to offer attractive returns as a result of an improving US economic outlook," she added.

Half of the managers surveyed said they are bullish on North American equities. For bonds, however, the respondents seemed a little less optimistic, with those taking a neutral stance over the investment class at 56 per cent, up from 33 per cent in the prior quarter. For the present quarter, 44 per cent had a positive outlook, up from 56 per cent previously.

The fact that bonds had record gains in 2009 is making fund managers cautious in 2010 and turn to equities, the survey said.