–Cash Levels Slip, Inflation Expectations Drop
–More Bullish View Tends to Be a Counter-Indicator
By Vicki Schmelzer
NEW YORK (MaceNews) – Global investors were more bullish and more overweight equities in November as world growth expectations turned positive for 2026, according to a survey of investors.
This month a net 3% of those polled looked for stronger growth in the coming year, the first time in 2025 that “global expectations on the economy turned positive,” the Bank of America Global Research Fund Manager Survey reported.
In October and September, a net 8% and net 16% respectively, looked for weaker growth in the coming 12 months. As a reminder, in April, a net 82% of managers looked for weakness, the “most on record” in the survey’s 30-year history.
Cash levels slipped further as managers put more money to work in November.
Inflation concerns plummeted this month, with a net 2% of fund managers looking for lower global CPI in 12 months’ time. This compared to a net 24% looking for higher inflation in each of the two previous months.
This month, a net 34% of portfolio managers were overweight global equities, up from a net 32% in October and a net 28% in September.
In November, a net 12% were underweight bonds, compared to a net 24% underweight in October and a net 3% underweight in September.
Fund manager cash levels fell to 3.7% this month, down from 3.8% in October and from 3.9% in September.
“Note cash levels of 3.7% or lower has occurred 20 times since 2002, and on every occasion, stocks fell and Treasuries outperformed in the following 1-3 months,” the survey said.
Cash allocations held at a net 8% underweight in November, compared to a net 13% underweight in October and a net 4% underweight in September.
Allocation to real estate stood at a net 16% underweight this month, compared to a net 12% underweight in October and a net 22% underweight in September.
In November, commodity allocation stood at a net 17% overweight, up from a net 14% overweight in October and a net 8% overweight in September.
In terms of regional equity allocation, despite a more upbeat economic outlook, all regions saw signs of retrenchment.
Allocation to U.S. equities flipped to a net 6% underweight in November from a net 1% overweight in October and compared to a net 14% underweight in September.
This month, a net 9% of those polled were overweight eurozone stocks, compared to a net 18% overweight in October and a net 15% overweight in September.
Allocation to global emerging markets fell to a net 36% overweight in November from a net 46% overweight in October. This compared to a net 27% overweight in September.
This month, allocation to Japanese equities slipped to a net 4% underweight from a net 1% underweight in October, while UK equity allocation fell to a net 29% underweight from a net 19% underweight last month.
In terms of year-end targets for 10-year U.S. Treasuries and the S&P 500, 45% of portfolio managers looked for 10-year yields to be in the 4.0% to 4.5% range by the end of 2026, while 43% looked for the S&P 500 to end 2026 in the 7,000 to 7,500 range.
In terms of the three biggest “tail risks” seen by managers, in November, these were “AI bubble” (45% of those polled), “Disorderly rise in bond yields” (17%) and “Inflation” (16%). Note that the fourth tail risk “U.S. consumer credit crunch” was new on the list of concerns.
Last month, the top three “tail risks” were: “AI equity bubble” (33% of those polled), ” 2nd wave of inflation” (27%), “Fed loses independence and US dollar debasement” (14%).
In November, the three “most crowded” trades were seen as “Long Magnificent 7” (54% of those polled), “Long Gold” (28%) and “Short U.S. dollar” (6%).
In October, the three “most crowded” trades were “Long Gold” (43% of those polled), “Long Magnificent 7” (39%) and “Short US dollar” (8%).
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 202 panelists, with $550 billion in assets under management, participated in the BofA Global Research fund manager survey, taken November 7 to November 13, 2025. “172 participants with $475bn AUM responded to the Global FMS questions and 95 participants with $209bn AUM responded to the Regional FMS questions,” BofA Global said.
Contact this reporter: vicki@macenews.com