The report shows that 27 percent of investment managers believe that U.S. equities are undervalued.

Just over a quarter of investment managers believe that U.S. equities are undervalued, the smallest percentage recorded since the second half of 2008, according to a new survey from Northern Trust.

The report shows that 27 percent of investment managers believe that U.S. equities are undervalued. This compares with two-thirds (67 percent) who say that U.S. equities are appropriately valued and one-third (33 percent) who content that stocks are overvalued.

In the undervalued camp, most investment managers believe that emerging market equities can only go north.

“The largest percentage of managers for any region (63 percent) views emerging market equities as undervalued,” the report states. “Another 23 percent of respondents believe they are appropriately valued, in line with last quarter’s results.

The report adds that managers are “most bullish” in respect to U.S. large-cap equities and emerging market equities. U.S. small-cap equities fell from third place last quarter to fourth this quarter. Emerging market equities rose to the second- from fourth-ranked asset class.

Among the report’s additional findings:

  • 56 percent of managers are bullish on U.S. large caps, with 49 percent bullish and 7 percent very bullish.
  • 50 percent are bullish on emerging market equities, up from 42 percent last quarter, with 42 percent bullish and 8 percent very bullish.
  • 49 percent of managers are bullish on non-developed equities, up from 48 percent last quarter.
  • Private real estate and private equity rank fifth and sixth, respectively.
  • Managers are bearish on U.S. fixed income (64 percent), cash (52 percent) and non-U.S. bonds (46 percent).

Read the full report here.