A decline in world equity markets has forced investors to sale back their risk taking and return to recession-proof stocks, according to Merrill Lynch's monthly survey of fund managers.

According to the Bank of America Corp. unit, average cash balances rose to 4.7% in July from 4.2% a month earlier. A net 11% of respondents are now overweighting pharmaceuticals compared with a net 2% underweighting of the sector in June.

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