Fund managers see economic conditions bouncing back worldwide, but they have become more worried about inflation, according to Merrill Lynch's monthly Fund Manager Survey.

Out of 249 fund managers surveyed, 50% said they were more optimistic about a market upswing, compared with 41% last month. Both numbers are a significant increase from the first survey of the year where only 22% of fund managers were positive about the economic outlook for the coming 12 months. Fund managers are also becoming more optimistic about the earnings outlook for companies and are showing an increased appetite for risk in investing.