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Mumbai: The latest survey of global fund managers by Bank of America Securities shows that investors remain cautious even as deployment of cash has increased. Investors believe a second wave of Covid-19 remains the largest tail risk for markets.
Cash levels are lower than in April and May, but they have risen to 4.9 per cent from 4.7 per cent in June and are still on the higher side. “Investor sentiment remains cautious; consensus positioned for bad news on virus, macro,” said Bank of America in the survey.
The survey took place between July 2 and July 9, and 210 participants with $6-7 billion in assets under management took part in it.
About 52 per cent of the investors said coronavirus’ second wave is the largest tail risk followed by the US elections and 74 per cent said long US tech stocks is the most crowded trade currently — the highest reading in the history of the survey.
Bank of America said only 14 per cent of the fund managers surveyed believe the recovery will be V-shaped. “24 per cent of investors think the economy is (in) early-cycle, up from 16 per cent last month while 62 per cent of investors think the economy is in a recession, down from 72 per cent last month,” said Bank of America Securities.
The July survey showed that fund managers have raised global growth expectations by another 11 percentage points to net 72 per cent — the highest since January 2014. Around 36 per cent expect the global economy to get a lot stronger.
Inflation expectations have also risen along with the expectations of a stronger economic turnaround. The survey showed 37 per cent of fund managers see higher global consumer price inflation in the next one year.
Cash levels are lower than in April and May, but they have risen to 4.9 per cent from 4.7 per cent in June and are still on the higher side. “Investor sentiment remains cautious; consensus positioned for bad news on virus, macro,” said Bank of America in the survey.
The survey took place between July 2 and July 9, and 210 participants with $6-7 billion in assets under management took part in it.
About 52 per cent of the investors said coronavirus’ second wave is the largest tail risk followed by the US elections and 74 per cent said long US tech stocks is the most crowded trade currently — the highest reading in the history of the survey.
Bank of America said only 14 per cent of the fund managers surveyed believe the recovery will be V-shaped. “24 per cent of investors think the economy is (in) early-cycle, up from 16 per cent last month while 62 per cent of investors think the economy is in a recession, down from 72 per cent last month,” said Bank of America Securities.
The July survey showed that fund managers have raised global growth expectations by another 11 percentage points to net 72 per cent — the highest since January 2014. Around 36 per cent expect the global economy to get a lot stronger.
Inflation expectations have also risen along with the expectations of a stronger economic turnaround. The survey showed 37 per cent of fund managers see higher global consumer price inflation in the next one year.