Is fund manager optimism faltering?
The latest survey gives some very mixed signals.
13th October 2026 11:44
by Dave Baxter from interactive investor
Fund managers are showing mixed feelings about the state of markets and the economy in the next 12 months, as multiple challenges come to bear.
The October 2026 edition of Bank of America’s monthly Global Fund Manager Survey did note that investors remained upbeat ahead of the US midterm elections, the third quarter earnings season and future Federal Reserve decisions on interest rates.
The proportion of respondents who expected “boom” conditions over the next 12 months, with growth and inflation both above trend, hit its highest level since February 22 at a net 47%.
However the intense optimism seen earlier this year is showing some signs of abating.
The survey’s broadest measure of respondent sentiment, based on cash levels, equity allocations and global growth expectations, fell from 7 to 6.4.
Cash levels remained at last month’s level of 3.9%, while some respondents appear to have lower expectations for global growth than before.
At the same time inflation expectations have actually fallen to their lowest level since January 2025, pessimism about bonds is subdued and six in 10 investors expected double-digit earnings per share growth in the next year.
Around three quarters of respondents do not expect the Federal Reserve to raise rates at its meeting on 28 October.
Some 31% of respondents pointed to a “disorderly rise in bond yields” as the biggest tail risk for markets.
Meanwhile, when asked what 10-year US government bond yield would cause them to shift from stocks to bonds, 37% of respondents said 6%.
Some 19% were already shifting into bonds, while 14% said a 6.5% yield would be required.
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