A lot can happen in a month. Between June and July, investors accelerated their retreat to cash as their confidence in the global economy plunged, according to the latest BofA Merrill Lynch Fund Manager Survey, released Tuesday.
The July survey found that only 42% of investors expected the global economy to strengthen in the next 12 months, down from 55% a month ago.
China was investors’ top-of-mind concern, as a net 62% expected the economy to weaken over the next year. Indeed, some 80% of respondents saw China’s GDP below 6% by 2018.
Cash levels in July soared to 5.5% of portfolios—their highest level since 2008—up from 4.9% in the June survey.
And for the first time in five years, gold was considered undervalued.
“Rising risk aversion and stretched cash levels provide a contrarian buy signal for risk assets in Q3,” Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, said in a statement.
A total of 191 panelists with $510 billion of assets under management participated in global and regional surveys in early July conducted by BofA Merrill Lynch Global Research and the market research company TNS.