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Portfolio > Alternative Investments > Private Equity

Confidence in Equities Reaches 10-Year High

By John Sullivan

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Money managers are more bullish on global stocks this month than at any time in the past decade, according to a BofA Merrill Lynch Global Research survey.

Bloomberg reported a net 67% of respondents, who together manage $569 billion, had an “overweight” position on global equities, the highest level since the survey first asked the question in April 2001. That compares with 55% in January and 40% in December. Meanwhile, a net 9% is “underweight” cash, the lowest allocation since January 2002.

The February survey “is one of the most bullish in years,” Gary Baker and Michael Hartnett, equity strategists at BofA Merrill Lynch, wrote in a report on Tuesday. “Surging inflation expectations show we are no longer in a Goldilocks environment and a meaningful tactical correction in risk assets could be caused by a jump in interest rates or weaker U.S. growth.”

According to Bloomberg, a net 34% of survey respondents are now “overweight” U.S. equities, up from 27% in January. Appetite for euro-area stocks has also risen, to net 11% “overweight” from 9% “underweight” in January. Meanwhile, February saw the biggest decline in emerging-market exposure in the survey’s history, with net 5% of managers now “overweight” global emerging-markets equities, down from January’s 43%.

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