–Investors Favor Eurozone, EM Markets over U.S.
By Vicki Schmelzer
NEW YORK (MaceNews) – Global fund managers remained “uber-bullish” in February, according to the latest Bof Global Fund Managers survey, released Tuesday.
Given this mindset, any rise in asset prices during the first quarter of 2026 may prove “much harder when all positioned for it,” the survey said.
In February, a net 39% of those polled looked for stronger economic growth in the coming year, up from a net 38% with that view in January and compared to a net 18% with that view in December.
“Global expectations on the economy turned positive in Nov’25,” the survey noted.
Back in April 2025, a net 82% of managers looked for economic weakness, the “most on record” (BoA Global 30-year history).
Inflation concerns resurfaced his month, with a net 9% of fund managers now looking for higher global inflation in the coming year. In January, a net 3% looked for lower inflation and in December, a net 3% looked for higher inflation.
Fund manager cash levels edged up to 3.4% in February from a record low of 3.2% in January and compared to a 3.3% in December.
Cash allocation held at a net 4% underweight, compared to a net 13% underweight in January and a net 11% underweight in December.
In February, portfolio managers continued to embrace riskier assets.
This month, a net 48% of portfolio managers were overweight global equities, unchanged from January and compared to a net 42% overweight in December.
A net 40% of managers were underweight bonds, versus a net 35% underweight in January and compared to a net 29% underweight in December.
Allocation to real estate stood at a net 16% underweight compared to a net 13% underweight in January and was back at December levels.
In February, commodity allocation rose to a net 28% overweight from a net 26% overweight in January and compared to a net 18% overweight in December.
In terms of regional equity allocation, fund managers favored most other regions over the United States.
Allocation to U.S. equities fell to a net 22% underweight in February, down from a 3% underweight in January and compared to a net 6% overweight in December.
This month, a net 35% of those polled were overweight eurozone stocks, up from a net 25% overweight in January and a net 18% overweight in December.
And on the FX front, a net 23% of those polled were overweight the euro, a record high” for the data going back to October 2004, BofA Global noted.
Allocation to global emerging markets (GEM) stood at a net 49% overweight in February, up from a net 40% overweight in January and a net 39% overweight in December.
This month, allocation to Japanese equities fell to a net 1% underweight from a net 3% overweight in January, while UK allocation improved to a net 15% underweight from a net 21% underweight last month.
In terms of the three biggest “tail risks” seem by managers, in February, these were “AI bubble” (25% of those polled), “Inflation” (20%) and “Disorderly rise in bond yields (17%).
In January, the top “tail risks” were “Geopolitical conflict” (28% of those polled), “AI bubble” (27%) and “Disorderly rise in bond yields” (19%).
In February, the three “most crowded” trades were seen as “long Gold” (50% of those polled), “Long Magnificent 7” (20%) and “Short U.S. dollar” (12%).
Last month, the three “most crowded” trades were as “Long Gold” (51% of those polled), “Long Magnificent 7” (27%), and “Short U.S. dollar” (7%).
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.
Fund managers were asked about the next chairman of the Federal Reserve in light of Jerome Powell’s term ending May 15 as well as upcoming mid-term U.S. elections.
On the nomination of Kevin Warsh as the next Fed chair, 38% of those polled looked Warsh’s leadership to lead to higher U.S. Treasury yields and a lower dollar, 21% looked for lower U.S. Treasury yields and a lower dollar, 15% looked for higher U.S. Treasury yields and a higher dollar, and 10% looked for lower U.S. Treasury yields and a higher dollar.
On November 3 mid-term elections, the majority of investors”, i.e. 62%, believed that the “most likely outcome” will be a “Democratic House and a Republican Senate.”
An overall total of 190 panelists with $512bn in AUM participated in the BofA Global Research fund manager survey, taken February 6 to 12, 2026.
Contact this reporter: vicki@macenews.com