Gloom deepens for fund managers
Professional investors retrench as growth expectations falter.
14th April 2026 12:19
by Dave Baxter from interactive investor
A sense of gloom seems only to have deepened among professional investors in the last month, with fund managers’ expectations for global growth dropping sharply thanks to conflict in the Middle East.
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The latest instalment of Bank of America’s monthly Global Fund Manager Survey found that respondents’ expectations for global growth had dropped to their lowest level since August 2025.
Meanwhile, the report argued that global investor sentiment had reached its most bearish level since June 2025, as based on a combination of cash levels, equity allocations and global growth expectations.
Global equity allocations dropped to a net 13% overweight (down from 37%), the lowest overweight since July 2025, while cash levels stayed at the high 4.3% level they reached in March.
Such gloom can largely be attributed to war in the Middle East, with 44% of respondents identifying geopolitical conflict as the number one tail risk, making April the second month in a row where it has been the most popular option. Some 26% of respondents pointed to inflation as the top tail risk.
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Having said that, the pessimism may not be as great as it could be. Some 52% of respondents see a soft landing as the most likely outcome for the global economy in the next year, while 32% expect no landing. Just 9% expect a hard landing, even if growth expectations have deteriorated.
Investors also continued to raise concerns about issues in the private credit space, with worries about the prospect of a credit default hitting their highest level since October 2023.
However, some of the usual market concerns at least appear to have receded somewhat.
The latest survey saw a net 64% of respondents describing US equities as overvalued – not a low number but still the lowest reading since February 2019.
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