The upturn in global investor sentiment withstood the recent large sell-off in bonds, according to the Merrill Lynch Survey of Fund Managers conducted for June and released this week.

A net 62% of respondents said the world economy will likely improve in the next 12 months, 5% more than in May. Just 7% of the panel said the world will go through recession in 2010, down sharply from 38% in May and 70% in April.

Responding investors express confidence in equity markets as well as the global economic recovery, despite their fears the sell-off would damage sentiment. The yield on 10-year US Treasuries rose to 3.85% from 3.09% between the May and June surveys.

“Investors are currently ruling out the prospect of the much-feared double-dip recession, and have shrugged off the weakness in bonds,” said Michael Hartnett, Banc of America Securities-Merrill Lynch chief global equity strategist.

Write to Diana Golobay.

Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.