Global fund managers are counting on an economic recovery worldwide in 2002, and remain optimistic about equity returns as a result. But they don’t think stocks are particularly cheap. Indeed, even bulls expect no better than single-digit returns in ’02.

Those are some of the key findings from the latest fund manager survey by Merrill Lynch, which in January polled 273 managers responsible for $755 billion in assets. Merrill Chief Investment Strategist David Bowers notes that managers are once again favoring large-cap and growth stocks over small-caps and value issues, and observes that many big investors are turning toward the Euro zone and emerging markets despite the weak European currency and Argentina’s financial crisis.