Equity Enthusiasm Peaks: Investors Most Optimistic in Nearly 3 Years, Reveals BofA Survey

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• Fund managers worldwide have become the ‘most bullish’ on equities in almost three years, since November 2021.
• This optimism is driven by the anticipation of interest rate cuts by global central banks.
• “The equity market is expected to be predominantly FX-driven this year,” noted a key participant in the survey.

Global fund managers show unprecedented optimism in equities, driven by expected policy shifts, reveals BofA’s latest survey.

Surge in Positive Sentiment Among Fund Managers

The recent Fund Manager Survey by Bank of America highlights a significant shift in sentiment, with fund managers displaying the highest level of optimism since November 2021. This change is largely attributed to the anticipated easing of monetary policies by central banks worldwide.

Detailed Insights from the May 2024 Fund Manager Survey

The survey, conducted between May 3 and May 9, 2024, involved 245 panelists who manage a combined total of $642 billion in assets. It revealed a robust bullish stance on global equities, with a notable preference for the Asia Pacific markets, particularly Japan and Taiwan, while showing less confidence in markets like Thailand, Indonesia, and Australia.

Regional Preferences and Economic Outlook

According to the survey, 18% of fund managers are overweight on Indian equities, a slight decrease from March. However, Japan remains a favored market, with nearly half of the respondents not expecting it to peak anytime soon. The survey also highlighted a significant rise in optimism towards the Chinese market, which has seen a 28% increase from its January lows.

Expectations on Global Economic Policies and Their Impacts

A substantial 82% of respondents anticipate the Federal Reserve will cut interest rates in the latter half of 2024. This policy shift is expected to influence various asset allocations, with a noticeable decrease in cash levels among fund managers, reaching a three-year low of 4% in May.

Conclusion

The May 2024 Fund Manager Survey by BofA Securities indicates a strong bullish sentiment in the global equity markets, influenced by expected policy relaxations from central banks. This sentiment is reshaping asset allocations, decreasing cash reserves, and increasing equity investments, signaling a potentially significant shift in global market dynamics.

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This Bitcoin snippet is structured to provide a comprehensive overview of the current sentiment among global fund managers regarding equity markets, based on the latest survey results from Bank of America.