Bank of America Corp.'s latest fund manager survey suggests that global investors who are aggressively buying stocks should consider reducing their exposure. The strategists from the bank highlighted that asset allocators have become exceptionally bullish, which is typically seen as a warning sign for market exuberance.
Contributing to this concern, cash levels among fund managers have fallen to an "uber-low" of 3.6% of assets this month, down from 4.1% in the previous month. This low cash allocation indicates that investors are heavily invested in the market, often a precursor to market corrections.
Furthermore, the survey revealed that positioning on US equities has reached its highest level since December 2024, with a net 24% overweight. This signals a strong conviction in US stocks, which Bank of America views as an indicator that the market may be nearing a peak.
