A new survey by Bank of America (BAC) has found that U.S. fund managers are extremely bullish on stocks.
The Global Fund Manager Survey for June has found that fund managers are more excited about equities than they have been in three years.
Cash now comprises only 4% of fund managers’ portfolios, the lowest level since June 2021.
About 32% of managers’ allocation out of money-market funds went into U.S. stocks, with another 19% being placed into foreign stocks.
The bullish sentiment comes as both the benchmark S&P 500 index and technology-laden
Nasdaq Composite index trade at all-time highs.
The June survey’s “Bull and Bear Indicator” that looks at fund managers’ cash levels, equity allocations, and economic growth expectations to assess their sentiment, hit its most bullish level since November 2021.
Fund managers say they remain positive on stocks because their outlook for the global economy has improved.
Nearly three-quarters (73%) of respondents said they don’t expect a global recession in the next 12 months.
Risks that could potentially disrupt the stock marker include higher inflation, geopolitical turmoil, and the U.S. presidential election this November.
As for the American economy, fund managers are still betting that the Federal Reserve will lower interest rates this year.
The survey found that 80% of managers expect three or more interest rate cuts from the U.S. central bank over the next 12 months.
