(Bloomberg) -- Investors holding $557 billion don’t seem to trust the epic stock rally of 2019, according to a survey by Bank of America Merrill Lynch.
Fund managers this month cut their equity exposure to the lowest level since September 2016, according to BofA, despite the 18 percent rebound in global shares. Investors are long defensive assets, such as cash and real estate investment trusts, and short cyclical instruments, such as U.K. and euro-zone stocks, the survey showed.
Although equities around the globe have been enjoying a robust recovery this year amid softer monetary policy, many investors have remained on the sidelines after being burned by the sudden sell-off at the end of 2018. More than a third of polled traders believe that the U.S. Federal Reserve’s tightening cycle is over, with 53 percent saying that short-term rates will stay the same or drop over the next 12 months.
The global survey period spanned the week through March 14 and included 186 participants with $557 billion of assets under management.
- Most crowded trade globally is short European stocks
- Overvaluation of U.S. dollar is highest since June 2002
- Growth, earnings-per-share expectations rose for second month
©2019 Bloomberg L.P.
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