By Steve Goldstein
Global fund managers were the most overweight to U.S. equities in eight years as their concerns over ebbing growth receded, according to the latest fund manager survey from Bank of America.
The allocation to U.S. equities jumped 13 points in November to 29% overweight — the highest reading since August 2013, the monthly survey found. These investors report being overweight U.S. equities since March 2019, which has continued to be a winning bet.
What’s interesting is the assembled fund managers say emerging market equities /zigman2/quotes/201454250/composite EEM +0.12% will produce the best returns next year, by a 34% to 30% margin over the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.30% .
Bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.67% was forecast to be the best asset next year by 12%, followed by oil /zigman2/quotes/211629951/delayed CL.1 +1.64% and gold /zigman2/quotes/210034565/delayed GC00 +0.11% at 10% each, and single-digit showings for short- /zigman2/quotes/211347046/realtime BX:TMUBMUSD03M +4.77% and long-dated /zigman2/quotes/211347052/realtime BX:TMUBMUSD30Y +0.64% Treasury securities.
Global growth expectations have stabilized. A net 3% expect improvement, compared to a net 6% who did not last month. In March, 91% expected improvement. Just 6% say there will be a recession in the next 12 months.
The monthly change saw investors sour on inflation plays, as energy, industrial and banks positions declined, while U.S. equities, consumer discretionary, bonds and tech improved. But relative to the average position of the last decade, investors are still overweight inflation assets.
That benign view toward inflation also manifested itself in yield curve expectations, where those expecting a steeper curve fell to the lowest level since February 2019.
The survey covered 388 managers with $1.2 trillion in assets under management, Bank of America said.