–Long Global Semiconductors Seen as Most Crowded Trade
By Vicki Schmelzer
NEW YORK (MaceNews) – Global fund managers sharply reduced cash and dove into equities in May, according to the latest BofA Global Fund Managers survey, released Tuesday.
The move was driven by “EPS optimism and a forecast of Fed rate cuts,” the survey said.
Cash levels dropped to 3.9% in May from 4.3% in April, “the biggest monthly drop since Feb ‘24,” the survey said, noting that a FMS cash reading below 4.0% “triggers a sell signal” for global equities.
“Note a median 4-week loss from global stocks after 24 sell signals since 2011 is -1% (biggest loss recorded post-sell signal is -29%, biggest gain 4%).
Cash allocation fell to a net 3% overweight in May from a net 20% overweight in April and compared to a net 8% overweight in March.
This month, a net 14% of those polled looked for weaker economic growth in the coming 12 months. In April, a net 36% looked for weaker growth and in March, a net 7% looked for stronger growth in the coming year.
A net 66% of fund managers now look for higher global inflation in the coming year, down from a net 69% in April and compared to a net 45% looking for higher inflation in March.
Fund managers increased equity, real estate and commodity holdings but trimmed bond holdings.
In May, a net 50% of portfolio managers were overweight global equities, up from a net 13% overweight in April and a net 37% overweight in March.
A net 44% of managers were underweight bonds, compared to a net 33% underweight in April and a net 36% underweight in March.
Allocation to real estate stood at a net 14% underweight in May, versus a net 18% underweight in April and a net 16% underweight in March.
This month, commodities allocation rose to a net 31% overweight from a net 20% overweight in April and compared to a net 34% overweight in March..
In terms of regional equity allocation, all regions except for the U.S. and Emerging Markets saw outflows of various sizes.
Allocation to U.S. equities improved to a net 20% overweight in May. This compared to a net 10% underweight in April and a net 17% underweight in March.
In May, a net 4% of those polled were underweight eurozone stocks, down from a net 4% overweight in April and a net 21% overweight in March.
Allocation to global emerging markets (GEM) rose to a net 48% overweight this month, up from a net 41% overweight in April but below the net 53% overweight seen in March.
In May, allocation to Japanese equities fell to a net 13% underweight from a net 11% overweight in April, while UK allocation slipped to a net 26% underweight from a net 16% underweight in April.
In terms of the three biggest “tail risks” seen by managers, in May, these were “2nd wave inflation” (40% of those polled), “Geopolitical conflict” (20%) and “Disorderly rise in bond yields” (18%).
In April, the three biggest “tail risks” were “Geopolitical conflict” (44% of those polled), “Inflation” (26%), and “Disorderly rise in bond yields” (9%).
In May, the three “most crowded” trades were seen as “Long global semiconductors” (73% of those polled), “Long Magnificent 7” (14%) and “Long Oil” (6%).
In April, the three “most crowded” trades were “Long oil” (24% of those polled), “Long global semiconductors” (24%) and “Long Gold” (15%)
Note: the term “Magnificent Seven” was coined by Bank of America’s chief investment strategist Michael Hartnett, referring to a basket of the seven major tech stocks: Apple, Microsoft, Amazon, NVIDIA, Alphabet, Tesla and Meta.
An overall total of 200 panelists with $517bn in AUM participated in the BofA Global Research fund manager survey, taken May 8 to May 14, 2026.
Contact this reporter: vicki@macenews.com