Mumbai Global Fund Manager Survey Shows Increased Risk Appetite and Bullish Sentiment
A recent global fund manager survey conducted by Bank of America Securities has revealed that the risk appetite in March is the highest it has been since November 2021. The survey also indicated that sentiment among fund managers is bullish but not extremely bullish. Here are the key findings from the survey:
Risk Appetite and Sentiment
- Two-thirds of the respondents believe that a recession in the next 12 months is unlikely.
- 62% of the participants forecast a โsoftโ landing, while 23% expect no landing, and 11% anticipate a hard landing.
- 226 fund managers with $572 billion of assets under management (AUM) participated in the survey.
The survey also revealed that the average cash level of the fund managers increased slightly from 4.2% to 4.4% of their AUM. According to Bank of America Securities, when the average cash balance rises above 5%, it triggers a buy signal for equities, and when it falls below 4%, it triggers a sell signal.
Most Crowded Trades
Fund managers identified the following as the most crowded trades in March:
- โMagnificent 7โ stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla.
- Japan
- Bitcoin
Bearish bets on Chinese equities were also highlighted as one of the most crowded trades. Furthermore, there was a divide among investors regarding whether AI stocks are in a bubble, with 40% saying yes and 45% saying no.
Hot Take: Increased Risk Appetite and Bullish Sentiment in Global Fund Managers
The recent global fund manager survey conducted by Bank of America Securities indicates a growing risk appetite among fund managers. With the risk appetite in March reaching its highest level since November 2021, it suggests an optimistic outlook for the market. Although sentiment is bullish, it is not excessively bullish, indicating a cautious approach from fund managers. The survey also sheds light on the most crowded trades and investor opinions on various market trends.
The findings of this survey provide valuable insights into the current market sentiment and investment strategies employed by fund managers. As an investor, it is crucial to stay informed about these trends and consider them while making investment decisions.
Sources:
- Bank of America Securities
- Recession Definition
- Assets Definition
- BofA Global FMS
- Equities Definition
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