The only reason to be bearish — well, there is no reason, say investors in Bank of America Global Research’s February fund manager survey.
The survey found respondents’ sentiment on global growth at an all-time high, with net 91% expecting a stronger economy, up a percentage point from January and the brightest outlook in survey history, BofA said.
Thirty-four percent of investors now expect a V-shaped recovery, whereas nine months ago only 10% did.
For the first time since January 2020, investors favor increased capital expenditures over improved balance sheets as 51% of those surveyed are urging chief executives to spend more. Inflation expectations peaked in January, the survey found, dropping six points in February to 86% of respondents who expect higher global CPI in the next 12 months.
The survey was conducted Feb. 5 to Feb. 11 among 225 investors with $645 billion in assets under management.
In February, investors’ cash levels dropped one point month over month to 3.8%, the lowest level since March 2013, just before the “Bernanke taper tantrum,” BofA said, referring to when Treasury yields surged as then-Federal Reserve Chairman Ben Bernanke announced the central bank would taper off its quantitative easing.
The fund manager cash rule holds that when average cash balance rises above 4.5%, a contrarian buy signal is generated for equities, and when the cash balance falls below 3.5%, a contrarian sell signal is generated.