One thing that could contribute to a further global stock market selloff is fund managers’ bullish positioning, according to Bank of America’s Global Fund Manager survey.
The bank’s strategists say that investors are the most overweight stocks since February, the most overweight commodities in over three years, and on very low cash levels, our colleagues on the equities team report. This means that investors have a higher allocation to these asset classes than compared with their benchmark.
And Bank of America sees a risk that the “froth” could correct further if the Federal Reserve doesn’t cut interest rates in December.
Interestingly, the survey showed that investors have been cutting their exposure to the UK by the most since October 2022, and consider British assets as a contrarian long.
