Cash allocation, BofA suggested, jumped to 5.5 per cent from 5.2 per cent in January. February was, in fact, the 15th straight month when cash level stayed above the 5 per cent level.
BofA’s March global fund manager survey, which saw participation of 212 fund managers with $548 billion in assets under management, suggests investor sentiment is close to levels of pessimism seen at lows of past 20 years. Systemic credit event emerged as the top tail risk at 31 per cent of FMS investors. High inflation, hawkish central banks and worsening of geopolitics have emerged as other top tail risks.
Cash allocation, BofA suggested, jumped to 5.5 per cent in March from 5.2 per cent a month ago. March is, in fact, the 15th straight month when cash level stayed above the 5 per cent level — the only period that saw higher cash allocation for longer was the 32-month bear market of 2000-2022!
A net 41 per cent of participants said they were taking lower-than-normal risk levels, a 9 percentage points jump from February 2022 level. Risk appetite is comparable to levels seen in March 2022, the fund manager survey suggests.
BofA said FMS investors’ sentiment worsened in February, with two out of three key measures of sentiment deteriorating month-on-month. The net percentage of FMS investors saying companies are overleveraged increased 8 per cent month-on-month (MoM)to net 23 per cent, the highest level since July 2021. A total of 55 per cent of FMS investors want corporates to improve balance sheets over increasing capital spending (21 per cent) or returning cash to shareholders (17 per cent), the survey suggested.
