The CFA UK Valuation Index asks investment professionals their opinion on the current value of a range of asset classes, giving them the options of very undervalued, somewhat undervalued, fair value, somewhat overvalued and very overvalued.
Only 5% felt DM equities were very undervalued and 45% said they viewed them as somewhat undervalued, while only 24% saw them as somewhat overvalued or very overvalued.
Will Goodhart, chief executive of CFA UK, said: "Although equity indices are at slightly lower levels than the time of our April survey, they are still higher than those in January. Despite this, a greater proportion of our respondents now rate equities as undervalued over one year than they did in January.
"With no obvious improvement in the wider background, this shift is likely to reflect a re-pricing of fair value for equities, driven by the continued decline in bond yields. As prospective returns from fixed income continue to fall, the relative attractions of equities regardless of market, appear to have increased."
Emerging market equities were also considered undervalued by 48% of the investment professionals surveyed, while only a quarter viewed them as overvalued.