Cash levels held by global and European fund managers had jumped to their highest levels since the Lehman Brothers crisis amid concerns over China and the Eurozone in early July.
Cash made up 5.5% of portfolios and gold was judged as being undervalued for first time in five years, according to the Bank of America Merrill Lynch Fund Manager Survey.
Overall, equity allocations were unaffected by the higher risk aversion, however, and bonds were still seen as overvalued compared to equities and as being more at risk from a volatility-driven crash.
European equity allocations and the growth outlook were cut to six-month low, according to the survey, yet Europe remained the most popular region. There was a renewed optimism because of the cheaper euro and this led to increased intentions to own European stocks on a 12-month view.
Appetite to overweight European stocks increased, the survey found.
The survey was conducted among 191 panellists between July 2 and July 9.
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