Fund manager pessimism melts away
Professional investors have upped their equity exposure and cut cash allocations.
19th May 2026 11:27
by Dave Baxter from interactive investor
Fund managers are throwing caution to the wind as pessimism about the global economy “melts away”.
The latest instalment of the widely followed Bank of America Global Fund Manager Survey pointed to a “bull capitulation”, with professional investors applying a record high increase to their equity allocations.
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This in turn saw them chop cash levels back from April’s 4.3% to 3.9%.
The about-turn in sentiment relates to events in the Middle East and the broader outlook for the economy.
Two-thirds of respondents to the survey expect the bottleneck in the Strait of Hormuz to end in the next few months, while pessimism about the state of global growth appears to have dissipated.
Just 4% of respondents predicted a hard landing for the economy, while the survey saw a big increase in the number of respondents who expect double-digit earnings per share growth for companies.
Against this backdrop, the Bank of America predicted that early June could be “ripe for profit-taking”.
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Meanwhile, almost three-quarters of respondents to the survey identified being long on global semiconductor shares as the top crowded trade of the month.
When asked to identify the biggest tail risk for markets, 40% pointed to the spectre of inflation.
In terms of other allocations, respondents are the most overweight to tech shares since February 2024, have their highest commodity overweight ever, and are their most underweight on bonds since back in June 2022.
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