Fund Mangers Cut Cash and Embrace Risk, Bofa Survey Shows

Dow Jones07-15 23:38

Stock markets have taken investors on a wild ride so far this month.

But money managers aren't dialing back on risk. They have cut their cash holdings to an "uber-low" 3.6% and upped their allocations to U.S. equities, taking their exposure to its highest level since late 2024, according to Bank of America's monthly fund manager survey.

When it comes to the global economy, more fund managers expect it to boom over the next 12 months, compared with last month, though 47% of them still expect to see stagflation.

Other findings from the survey, which ran from July 2 to July 9:

-- Perhaps not surprisingly, over four-fifths of fund managers picked global semiconductors as the most crowded trade on the market.

-- Hyperscalers' AI-linked capital expenditures overtook private credit as the most likely cause of a systemic credit event (aka a major meltdown).

-- However, a plurality of 48% don't think AI stocks are in a bubble, compared with 43% who do.

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