Global fund managers most bullish in two years as growth expectations improve
The proportion of investors expecting a weaker economy in the next 12 months decreased to a net 25%, from January’s 40%, the survey found.
Sentiment rose to 4.1 from 2.9, based on cash levels, equity allocations and economic growth expectations. A record low, close to 0, was registered in the aftermath of the collapse of Silicon Valley Bank in March 2023.
Overall, cash levels have been cut to 4.2% from 4.8%, due to global growth expectations hitting two-year highs and investors taking advantage of the US tech rally.
The proportion of investors expecting a weaker economy in the next 12 months decreased to a net 25%, from January's 40%, the survey found, with «big improvements» in global growth expectations from a low of net 79% expecting a weaker economy in July 2022.
Sell side equity sentiment reaches highest level since May 2022
A soft landing remains the most commonly expected outcome of the hiking cycle, with 65% of investors predicting the Fed will achieve this, while the probability of a hard landing has faded to just 11%. By contrast, 19% of respondents expect «no landing», up from 7% in January.
Long ‘Magnificent Seven' continued to be the most crowded trade (61%), followed by short China equities (25%) and long Japan equities (4%).
As a result, allocation to US equities rose 7 percentage points month-on-month to a net 21% overweight, the highest level since November 2021, BofA noted.
Similarly, global fund managers raised their allocation to technology by 10 ppt month-on-month to a net 36% overweight, one of the highest levels since August 2020.
Tech has become the top overweight sector, a position it has not held since July 2021, replacing healthcare, which held the top spot between March 2022 and January 2024.
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