Money managers are still bearish on the global economy, though sentiment is improving, according to the Bank of America Merrill Lynch Fund Manager Survey for December.

A net 40 percent of the 255 managers polled believe global growth will increase in the next year. While that number is nothing to write home about, it’s up from 34 percent in November and only 20 percent in October.

Money managers are much more enthusiastic about China’s economy, with a net 67 percent expecting its growth to accelerate next year, up from a net 51 percent last month.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

Despite that sentiment, these managers aren’t so hot on resources stocks, with the sector at its lowest allocation in four years.

"They're saying we feel good about the Chinese growth story, but they're not betting on materials stocks and energy," Kate Moore, BofA Merrill Lynch global equities strategist, tells CNBC.

That should make these stocks attractive for investors next year, she says.

As for the fiscal cliff, the proportion of managers who see it as the markets’ biggest risk dropped to 47 percent from 54 percent in November.

But Pimco CEO Mohamed El-Erian says that the U.S. economy will likely measure modest growth, even if the cliff is bypassed.

"If we avoid the fiscal cliff, which is our expectation, we're still looking at growth of 1.5 to 2 percent next year," he tells CNBC.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.