Global investors’ worries about a trade war skyrocketed in July, Bank of America Merrill Lynch reported Tuesday.

Sixty percent of respondents in Merrill’s fund manager survey said a trade war was the biggest tail risk to the markets, 29 percentage points higher than in the June survey. Merrill said this was the highest tail risk recorded since the 2012 EU debt crisis.

(Related: Fed’s Powell Says Trade Barriers Threaten Wages and Growth)

Nineteen percent of investors said a hawkish policy error by the U.S. Federal Reserve or European Central Bank was a major tail risk, and 6% cited a euro/emerging markets debt crisis.

The survey was conducted July 6 to 12 among 231 panelists with $663 billion in assets under management.

“Investor sentiment is bearish this month, with survey respondents eyeing the risks from a possible trade war,” Merrill’s chief investment strategist Michael Hartnett said in a statement. “Equity allocation has fallen notably while growth and profit expectations have slumped.”

Net -11% of survey respondents said they expected faster global growth in the next 12 months, down 12 points from last month and the lowest level since Feb. 11, 2016, when the S&P 500 hit an intraday low of 1,810.

Asked their expectations for global profits, net 9% of investors expected no improvement in the next 12 months, down 53 points from the beginning of the year.

According to the survey, net 11% of respondents did not think corporate earnings would improve by 10% or more over the next year, way down from net 35% in February.

Global equity allocation in July fell 14 percentage points to net 19% overweight, the lowest level since November 2016. The survey found notable shifts in regional equity allocations.

Allocation to U.S. equities rose eight points to 9% overweight, the highest level in 17 months, after having been 28% net underweight in September.

An eight-point drop in allocations to eurozone equities reduced the allocation to net 12% overweight, the lowest level since December 2016.

Emerging market equities experienced their biggest decline in two years, plummeting 23 points to net 1% underweight.

U.K. equities allocations saw their fifth consecutive monthly increase in July: three points to net 18% underweight, the highest level since February 2016.

Average cash balance dipped to 4.7% in July from 4.8% in June, still above the 10-year average of 4.5%.

The fund manager cash rule holds that when average cash balance rises above 4.5%, a contrarian buy signal is generated for equities; when the cash balance falls below 3.5%, a contrarian sell signal is generated.

For the sixth straight month, Long FAANG (Facebook, Apple, Amazon, Netflix and Google’s parent Alphabet) + BAT (Baidu, Alibaba and Tencent) remained the most crowded trade, identified by 53% of investors.

Short emerging market equity and long oil rounded out the three most crowded trades, cited by 12% and 10% of investors.

Allocation to technology rebounded by 10 points to net 33% overweight, making it July’s most favored sector. In contrast, allocation to banks plunged 17 points to net 3% overweight, totaling a 33-point drop over two months.

Allocation to commodities stayed close to its eight-year high recorded in June, ticking down one point to 6% overweight.

Net 25% of investors considered oil overvalued, up seven points from last month and the highest level since April 2012, when West Texas Intermediate averaged $103 a barrel. A record net 17% of respondents said gold was undervalued.

Eighteen percent of survey participants said the yen was undervalued, down 11 points from June and the Japanese currency’s cheapest valuation since October 2008.

Passive Investing and ETFs

Seventy-nine percent of July survey participants responded to the poll’s new section on passive instruments and exchange-traded funds, 47% of which said they actively used ETFs within their portfolios, down from 53% in May and 49% in June.

Merrill said 20% (weighted average) of fund managers’ assets were allocated to ETFs, well above the 11% ETF allocation of the firm’s private clients. Only 11% of respondents said they invested more than 41% of their portfolios in ETFs.

Seventy-nine percent of investors reported that they used ETFs to gain equity market exposure, up three points from June, versus 8% for corporate bonds and 3% for government bonds.

Seventy-three percent used ETFs to passively track broad equity market indexes. Smart beta and multi-asset thematics trailed at 10% and 6% usage.