A record 85% of fund managers think the global economy is in the late cycle, research shows.
Further to this, nearly 40% of respondents to the Bank of America/Merril Lynch (BoAML) fund manager survey said they expected deceleration in global economic growth over the next year.
This is the worst outlook on global growth since November 2008, the bank said.
Fund managers said the US dollar was “very” overvalued, most notably against emerging market currencies, which are seen as more undervalued than ever in fund manager survey’s history.
The biggest risks were cited as: trade war (35%); quantitative tightening (31%); China slowdown (16%).
Allocation to global equities held steady at net 22% overweight, close to July’s recent low of net 19% overweight.
The US lost out to Japan as the most favoured equity region globally.
Allocations to bonds went to a net 50% underweight, “but still firmly off the record low of net 69% underweight in February”, the survey showed.
“Investors are bearish on global growth,” said Michael Hartnett, chief investment strategist at BoAML, “but not bearish enough to signal anything but a short-term bounce in risk assets.”
The survey had 174 participants.
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