In a survey Bank of America Merrill Lynch conducted a week before Donald Trump’s inauguration, fund managers said they were positioned for stronger growth and inflation, but still hesitated to reduce cash.

A net 62% of investors said they expected global growth to improve, up from net 57% in Merrill’s December survey. Global inflation expectations remained elevated at net 83%, the fifth highest reading on record.

Seventeen percent of investors said they expected “above-trend” growth and inflation, a 5.5-year high and up from 12% in December, according to the survey.

The survey identified a big rise in the percentage of investors who expected corporate earnings to rise by 10% or more in the next 12 months — to net -22% from net -47% in December, the most bullish reading since June 2014.

However, cash levels rose to 5.1% from 4.8% in December, well above the 10-year average of 4.5%. Why?

The survey pointed to three tail risks most often cited by respondents:

  • Trade war/protectionism — 29%
  • U.S. policy error — 24%
  • China foreign exchange devaluation — 15%

“Ahead of the U.S. presidential inauguration, investors are positioned for stronger growth and inflation, but are not willing to turn fully bullish with China-related risks on the horizon,” Michael Hartnett, chief investment strategist at BofAML, said in a statement.

For its January global fund manager survey, BofAML polled 215 investors with $547 billion in assets under management.

Forty-one percent of managers responding to the poll said the biggest equity driver over the next six months would be Treasury yields, while 28% cited the U.S. dollar and 14% said the European risk premium.

Nearly half of investors identified long U.S. dollar as the most crowded trade, followed by short government bonds and long high-quality/minimum volatility, cited by 11% each.

A net 22% of investors thought the greenback was overvalued, the highest percentage since November 2006, while 13% said the euro was undervalued, the highest percentage asserting this since April 2003.

Asked what 10-year Treasury yield would trigger an equity bear market, 53% of respondents said 4%, 20% said 5% and 16% said 3%.

In the January poll, investors reported that they were buying eurozone, technology, equities and REITs, and selling industrials, emerging markets equities and commodities.

Allocations to eurozone equities shot up to net 17% overweight from net 1% underweight in December.

Manish Kabra, BofAML’s European equity quantitative strategist, said in the statement, “Fund managers have returned to Europe amid improvement in the macro outlook, but U.K. remains the most underweighted region.”

Allocation to Japanese equities remained unchanged from December at net 21% overweight. “USD/JPY and Japanese stocks have been bought as inflation assets,” said Shusuke Yamada, chief Japan FX/equity strategist.

“Whether the post-election market trend reaccelerates or unwinds, these two asset classes are likely to be among the most impacted.”