Global fund managers are displaying increased optimism, according to Bank of America’s December survey. The survey indicates a significant shift in investment strategies, with investors becoming more overweight on stocks than they have been since December 2024. Simultaneously, they are the most underweight on bonds since October 2022 and commodities since September 2022.
The survey highlights significant overweight positions in equities, particularly in banks and healthcare. Conversely, the largest underweight positions are in cash, consumer staples, and the energy sector. A notable rotation into United States stocks has also been observed, with tech reaching its largest overweight since July 2024 and materials since April 2024. This trend coincides with a move away from bonds, healthcare, and staples.
Contrarian trades identified in the survey include longing cash and bonds while shorting stocks and commodities. More specific contrarian positions involve longing United Kingdom stocks, shorting emerging markets’ stocks, longing energy and staples, and shorting tech and banks.
Bank of America conducts this monthly survey to gauge the investment sentiment and asset allocation strategies of global fund managers, offering insights into current market trends and potential investment opportunities. The results provide a snapshot of how investors are positioning themselves in response to prevailing economic conditions and market dynamics.
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