Global investor sentiment has reached its most bullish level since July 2021, according to Bank of America’s latest monthly survey of global fund managers. The bank’s broadest measure of fund manager sentiment, which considers cash levels, equity allocation, and global growth expectations, has risen from 7.3 to 8.1. This indicates a significant shift in outlook among investors as they begin the new year.
Cash allocations have decreased to a record low of 3.2 per cent, a further drop from 3.3 per cent in December. This marks a substantial turnaround from the higher cash levels seen in April 2023, at 4.8 per cent, and October 2022, at 6.3 per cent, when pessimism was more prevalent. The survey also revealed that a net 44 per cent of investors anticipate global profits to improve over the next 12 months, the highest percentage since July 2021.
The survey also explored crowded trades and opinions on specific market trends. “Long gold” has emerged as the most crowded trade in January, with 51 per cent of fund managers favouring it, a significant increase from 29 per cent in December. This replaces “Long Magnificent Seven”, which has decreased from 54 per cent to 27 per cent. Regarding AI stocks, a majority of fund managers, 55 per cent, do not believe they are currently in a bubble, while 40 per cent think they are.
