Fund managers gradually move away from cash and towards stocks – BofA survey

LONDON (Reuters) – Investors turned more optimistic about the global economy in February, increasing allocations to equities and cutting their cash holdings to levels last seen since before the war in Ukraine, a BofA survey of global investors showed on Tuesday.

The survey of 299 fund managers, who have a combined $847 billion in assets under management, found investors were still broadly cautious, but less so than been in recent months. Just 24% predict a recession compared to 77% who did in November, according to the survey, which covered the week to Feb 9.

Investors remain net overweight cash and underweight equities, but a combined index that measures growth expectations, cash allocations and equity allocations improved to its highest level in a year.

“(Fund manager survey) investors remain pessimistic in February but to a lesser degree, with all key measures of sentiment improving (month on month) and shift in positioning highlighting stronger risk appetite,” BofA analysts said in a note.

The survey also found that the percentage of investors who are overweight emerging market equities increased by 51 percentage points from November 2022 to February, marking the largest three-month increase on record.