–Geopolitical Conflict Still Top Tail Risk
By Vicki Schmelzer
NEW YORK (MaceNews) – Global fund managers pared risk holdings in April, with the move driven by a sharp reassessment of growth and inflation expectations, according to the latest BofA Global Fund Managers survey, released Tuesday.
This month, a net 36% of those polled looked for weaker economic growth in the coming 12 months. This compared to a net 7% looking for stronger growth in March and well down from the net 39% looking for stronger growth in February.
As background, in April 2025, a net 82% of managers looked for economic weakness, the “most on record” (BoA Global 30-year history).
A net 69% of fund managers now look for higher global inflation in the coming year, compared to a net 45% with that view in March and a net 9% looking for higher inflation in February.
Surprisingly, cash levels remained unchanged at 4.3%, but last month already saw a sharp rise from the 3.4% seen in February, which was “the biggest jump since March 2020.” As a reminder, cash levels saw a “record low” of 3.2% in January, the survey reminded.
However, cash allocation rose markedly to a net 20% overweight in April. This compared to a net 8% overweight in March and a net 4% underweight in February.
Fund managers pared back equity and commodity holdings, while other asset classes saw minimal change.
This month, a net 13% of portfolio managers were overweight global equities, down from a net 37% overweight in March and a net 48% overweight in February.
A net 33% of managers were underweight bonds, compared to a net 36% underweight in March and a net 40% underweight in February.
Allocation to real estate stood at a net 18% underweight in April, compared to a net 16% underweight in March and February.
This month, commodities allocation fell to a net 20% overweight from a net 34% overweight in March and compared to a net 28% overweight in February.
In terms of regional equity allocation, all regions except for the U.S. saw outflows of various sizes.
Allocation to U.S. equities improved to a net 10% underweight in April, compared to a net 17% underweight in March and a net 22% underweight in February.
In April, a net 4% of those polled were overweight eurozone stocks, down from a net 21% overweight in March and a net 35% overweight in February.
Allocation to global emerging markets (GEM) slipped to a net 41% overweight this month, down from a net 53% overweight in March and compared to a net 49% overweight in February.
In April, allocation to Japanese equities fell to a net 11% underweight from a net 14% overweight in March, while UK allocation slipped to a net 16% underweight from a net 15% underweight in March.
In terms of the three biggest “tail risks” seem by managers, in April, these were “Geopolitical conflict” (44% of those polled), “Inflation” (26%), and “Disorderly rise in bond yields” (9%).
In March, these perceived “tail risks” were “Geopolitical conflict” (37%), “Inflation” (23%) and “Private Credit” (16%).
In April, the three “most crowded” trades were seen as “Long oil” (24% of those polled), “Long global semiconductors” (24%) and “Long Gold” (15%)
Last month the top “most crowded” trades were “Long Gold” (35% of those polled), “Long global semiconductors” (35%), and “Long Magnificent 7” (9%).
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 again asked the expected price of Brent crude oil by year-end, with 34% looking for Brent prices in the $80-$90 range, 28% eyeing a $70-$80 range, 22% a $90-$100 range, 1% looking for sub $60 per barrel and 6% looking for prices over $100 per barrel.
On overall views towards Brent, “28% of investors expect oil to trade at $90/bbl or higher by year-end. This compares to 12% a month ago,” BofA Global said.
In terms of Federal Reserve interest rate expectations going forward, 58% of those polled still look for the Fed to cut rates in the coming 12 months, even in the face of rising inflation expectations.
“Another 29% expect no change in rates, while just 10% expect the Fed to hike rates,” the survey said.
An overall total of 193 panelists with $563bn in AUM participated in the BofA Global Research fund manager survey, taken April 2 to April 9, 2026.
Contact this reporter: vicki@macenews.com