Global investors continue to show strong bullish positioning, yet an increasingly large share of portfolio managers say companies are committing too much capital, according to Bank of America’s latest monthly fund manager survey.
The poll, which canvassed 162 managers responsible for a combined $440 billion in assets, found a modest increase in cash allocations to 3.4% from January’s record low of 3.2%. Despite that small rise in cash, respondents remain substantially overweight equities and commodities and deeply underweight bonds.
Macro sentiment has strengthened further, with the proportion of managers expecting a global "boom" climbing to its highest level since February 2022. Forecasts for corporate earnings growth also rose, with expected gains topping 10% - the most optimistic readings since 2021.
At the same time, the survey recorded a record share of participants expressing concern that companies are spending too aggressively. That shift has influenced chief investment officers’ priorities: many now prefer measures to bolster balance sheets rather than pushing ahead with increased capital expenditure.
The combination of heightened optimism about global growth and simultaneous worries about overinvestment suggests investors see the outlook as favorable but increasingly fragile. Heavy allocations to equities and commodities reflect the bullish stance, while the pronounced underweight in bonds underscores managers’ preference for risk assets over fixed income exposure.
Context and portfolio implications
- Cash positions rose slightly, yet remain low by historical standards at 3.4%.
- Managers are positioning strongly for risk assets, maintaining overweight exposure to equities and commodities.
- Sentiment gauges for global growth and earnings have strengthened to multi-year highs.
The survey paints a picture of portfolios leaning into growth while simultaneously shifting priorities at the corporate level toward balance-sheet strength. That tension - between bullish market positioning and concerns over corporate overinvestment - is a central theme emerging from the latest manager responses.