Fund mangers are “max bearish on macro, not quite max bearish on the market,” strategists led by Michael Hartnett wrote in a note. “Peak fear” is not yet reflected in cash allocations, which currently stands at 4.8% of assets and would typically need to rise to 6%, they added.
Investor sentiment regarding economic prospects is the most negative in three decades, yet fund managers’ pessimism isn’t fully reflected in their asset allocation which could mean more losses for US stocks, a Bank of America Corp. survey shows.
Fund managers are extremely gloomy, with 82% of respondents to BofA’s monthly survey expecting the global economy to weaken. Consequently, a record number intend to reduce exposure to US equities, according to the poll.
