Fund managers are “super bearish” with average allocations to cash at the highest since 2001 and allocation to global stocks at an all-time low, according to Bank of America’s (BofA) monthly survey of global fund managers for September.
The results come even as MSCI’s gauge of stocks around the world (.MIWO00000PUS) has rallied 3% so far in September, though after a bruising first half the index is still down 16% this year.
The survey also marks a return to doom and gloom after August’s iteration found investors were bearish but no longer “apocalyptically” so.
BofA, which polled 212 investors overseeing $616 billion in assets from Sept. 2-8, said 72% of those surveyed said they expected a weaker economy next year, and the most crowded trade was long U.S. dollar.
The U.S. currency is typically seen as a safe haven in times of economic difficulty.
In contrast, investors were staying away from equities which typically rise in good times, and the survey found investors had a record underweight position in stocks.
They found the net percentage of investors who said they were overweight stocks was -52% compared to -26% the previous month, a lower level than during the financial crisis.