Global fund managers surveyed in August were the most bullish they have been since February, but “we do not think positioning is dangerously bullish,” Bank of America Global Research said Tuesday — before the S&P 500 closed at an all-time high.
Net 46% of participants in the new global fund manager survey said “it’s a bull market,” up from 40% in the July survey, while only net 35% saw a “bear market rally,” down from 47% last month.
Fund managers’ cash levels fell three percentage points to 4.6% in August, while their cash allocation dropped six points to net 26% overweight.
The survey was conducted Aug. 7 to Aug. 13 with participation by 203 fund managers with $518 billion in assets under management.
Among the positive findings in the new survey, net 79% of investors said they expected a stronger global economy in the next 12 months, up from 72% in July and the highest reading since December 2009. Thirty-four percent of respondents said they expected the global economy to get “a lot stronger.”
Fifty-seven percent of investors also said they looked forward to higher corporate profits over the coming year, up 21 points from July.
Survey participants’ inflation expectations increased 15 points month over month, with net 52% of anticipating a higher global Consumer Price Index in the next 12 months.
The survey found some negative sentiments among participants. Only 17% forecasted a V-shaped recovery, while 37% said it would have a W shape, up from 30% in July, and 31% saw a U-shaped recovery, down from 44%.
Fifty-seven percent of fund managers insisted that chief executives and chief investment officers improve their companies’ balance sheets, down 22 points from the April peak. Only 30% said they should increase capital expenditures — still double the May figure.
At the same time, 50% of investors said companies were overleveraged, a 10-point drop from July and the biggest one-month decline since September 2018.