Fund mangers are “max bearish on macro, not quite max bearish on the market,” strategists led by Michael Hartnett wrote in a note. “Peak fear” is not yet reflected in cash allocations, which currently stands at 4.8% of assets and would typically need to rise to 6%, they added.
High uncertainty surrounding US trade policy and a spike in financial-market volatility has unsettled stock investors. Respondents are a net 36% underweight US stocks in April, down from 17% overweight in February, the biggest ever two-month drop.
US equities have underperformed this year amid concern that President Donald Trump’s trade war will hurt growth, with 42% of survey respondents saying that a recession is likely in the world’s biggest economy.
See also: Japanese, Korean stocks gain after Trump's new tariff deadline
The S&P 500 has bounced from this month’s low but its year-to-date 8.1% drop lags European and Chinese benchmarks. BofA strategists expect the April lows to hold in the near-term and warned that “big upside needs big tariff easing, big Fed rate cuts, and/or economic data resilience.”
There were 164 participants with US$386 billion ($508.09 billion) in assets under management in the global poll conducted on April 4 - 10.
