Investors are turning away from U.S. stocks and toward Eurozone and emerging market equities, according to the BofA Merrill Lynch April Fund Manager Survey.

A net 20% of investors are now underweight U.S. equities – the lowest level since January 2008 – while 44% are overweight emerging market equities – the highest percentage in five years.

And an even higher percentage of investors, a net 48%, are overweight Eurozone equities, marking a 15-month high. The Eurozone, in fact, is now “the most favored” global region among fund managers, according to the survey.

(Related: US Stocks ‘Deeply Overbought’: Russell)

“Investors are showing love for Europe and scrambling out of U.S. equities, as the majority find U.S. stocks overvalued and perceive a risk of delayed U.S. tax reform,” said Michael Hartnett, chief investment strategist, in a press release.

Eighty-three percent of investors say U.S. stocks overvalued – a record high – and only 5% expect U.S. tax reform will be passed before the summer recess. Slightly more than 40% expect tax reform will pass by the end of the year, which is about the percentage that expect it won’t pass before next year.  

(Related: Market’s Moves Not All About Trump: Sonders)

U.S. stocks had rallied sharply after the election of Donald Trump in part because of his plans to cut corporate taxes, and hit record highs on March 1 before retreating.

                     

While fading hopes for U.S. tax reform are contributing to the negative outlook for U.S. stocks, the upcoming French presidential election appears to have little impact so far. 

“In spite of the French president election starting in less than a week, investors’ perception of Europe is increasingly bullish,” said Ronan Carr, European equity Strategist. “Although we agree on the allure of Europe’s earnings recovery, complacency looks extremely high.”

The first round of France’s presidential election will be held Sunday. Marine Le Pen, the leader of the National Front who has pledged a French exit from the Eurozone, is expected to survive the first round.

Investors expect a Le Pen win would mean a 5% to 10% drop in the Eurostoxx index but they are less fearful today of the dissolution of the EU than they were two months ago, according to the BofA Merrill Lynch survey.

Investors are, however, bearish on U.K. stocks because of that country’s pending departure from the EU. The U.K. is the “least preferred region” for European equities currently and is position within 1% of their all-time low, according to the survey.

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