Global Fund Manager Survey Magnificent Sentiment
GlobalFundManagerSurvey MagnificentSentiment Accessibleversion BofAFebruaryGlobalFundManagerSurvey BottomLine:mostbullishFMSin2years,cashlevelscutto4.2%from4.8%asglobalgrowthexpectationshit2-yearhighsandinvestorsgoall-inonUStech;BofABull&BearIndicatorat6.8…investorpositioningincreasinglyaheadwindforriskassets. OnMacro:forfirsttimesinceApr’22,investorsnotpredictingrecession(Chart1),globalgrowthoptimismhighestsinceFeb'22(net-25%);askedforpathofeconomythisyear,2/3ofinvestorssay"softlanding,"1/5say"nolanding,"1/10say"hardlanding." OnPolicy:lowerinterestratesthecatalystforoptimism:just4%expecthighershortrates,just7%expecthigherinflationand85%sayyieldcurvewillsteepen;noterecord46%sayfiscalpolicy"toostimulative." OnCrowds&Leaders:“longMagnificent7”mostcrowdedtradesince"longUS$"inOct'22(=biginflectionpoint);“shortChinastocks"2ndmostcrowdedtradeand1/4saystructuralUWofChinaisrightstrategy;leadershipofUSequitybull:41%say"largecapgrowth,"18%"smallcapgrowth,"12%"smallcapvalue,”11%“largecapvalue.” OnAA:globalequityallocationat2-yearhigh,allocationtoUSstockshighestsinceNov'21,totechsectorhighestsinceAug'20,togrowth>valuehighestsinceMay'20;investorscutcash,commodities,EM,defensives&energystocks(lowestsinceDec'20). FMSContrarianTrades:for"hardlanding"–longcash,defensives&shortUS/Japan&techstocks;for"nolanding"–longcommodities,energy,US$&shortbonds. Chart1:BofAFMSExpectationsofGlobalRecession Net%ofFMSinvestorssayglobalrecessionlikelyinthenext12months 13February2024 InvestmentStrategyGlobal MichaelHartnettInvestmentStrategistBofAS +16468551508 michael.hartnett@bofa.com ElyasGalou>>InvestmentStrategistBofASE(France) +33187700087 elyas.galou@bofa.com AnyaShelekhinInvestmentStrategistBofAS +16468553753 anya.shelekhin@bofa.com Myung-JeeJungInvestmentStrategistBofAS +16468550389 myung-jee.jung@bofa.com 120 80 40 0 -40 -80 -120 Net%SayingRecessionLikely Apr'20 NotestoReaders Sourceforalltablesandcharts:BofAFundManagerSurvey,DataStream Surveyperiod2ndto8thFeb2024 Mar'09 Nov'22 Feb'24 249panellistswith$656bnAUMparticipatedintheFebruarysurvey.209participantswith$568bnAUMrespondedtotheGlobalFMSquestionsand145participantswith '06'07'08'09'10'11'12'13'14'15'16'17'18'19'20'21'22'23'24 Source:BofAGlobalFundManagerSurvey BofAGLOBALRESEARCH Tradingideasandinvestmentstrategiesdiscussedhereinmaygiverisetosignificantriskandarenotsuitableforallinvestors.Investorsshouldhaveexperienceinrelevantmarketsandthefinancialresourcestoabsorbanylossesarisingfromapplyingtheseideasorstrategies. >>Employedbyanon-USaffiliateofBofASandisnotregistered/qualifiedasaresearchanalystundertheFINRArules. Referto"OtherImportantDisclosures"forinformationoncertainBofASecuritiesentitiesthattakeresponsibilityfortheinformationhereininparticularjurisdictions. BofASecuritiesdoesandseekstodobusinesswithissuerscoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision. $331bnAUMrespondedtotheRegionalFMSquestions. HowtojointheFMSpanel Investors/clientsareencouragedtosignuptoparticipateintheSurvey.ThiscanbedonebycontactingMichaelHartnettoryourBofAsalesrepresentative. Participantsinthesurveywillcontinuetoreceivethefullsetofmonthlyresultsbutonlyfortherelevantmonth ChartsoftheMonth Chart2:BofAFMSsentimentmostbullishsinceJan'22 PercentilerankofFMSgrowthexpectations, QE1 BRICS Bluewave Taxcuts Feb'24 COVID 9/11Iraqwar GFC US/EU debtcrisis CNYTrade devalwar SVB 10 9 8 7 6 5 4 3 2 1 0 FebruaryFMSsentimentimprovedfurthertothemostbullishlevelinmorethan2years. OurbroadestmeasureofFMSsentiment,basedoncashlevels,equityallocation,andeconomicgrowthexpectations,roseto4.1from2.9. '01'03'05'07'09'11'13'15'17'19'21'23'25 PercentilerankofFMSgrowthexpectations+cashAA+equityAA(scale1-10) Source:BofAGlobalFundManagerSurvey BofAGLOBALRESEARCH Chart3:Globalgrowthexpectationsrisetoa2-yearhigh Net%expectingstrongerglobaleconomynext12monthsvsS&P500(YoY%) Nov'11 Oct'98Dec'00 Feb'16 Jan'19 Jul'08 Mar'20 Jul'22 150Net%ExpectingStrongerEconomyS&P500(YoY%,RHS)100 50 0 -50 -100 '94'96'98'00'02'04'06'08'10'12'14'16'18'20'22'24 Source:BofAGlobalFundManagerSurvey;Bloomberg 70% 50% 30% 10% -10% -30% -50% InvestorsturnedmorebullishonthemacroinFeb…net-25%expectastrongereconomyoverthenext12months(vs.-40%inJanandmostoptimisticsinceFeb'22). Bigimprovementinglobalgrowthexpectationsvslowofnet-79%expectingastrongereconomyinJul'22. BofAGLOBALRESEARCH Chart4:"Softlanding"stillthebasecase,"nolanding"probabilityrising Whatisthemostlikelyoutcomefortheglobaleconomyinthenext12months? Softlanding 19% 65% Expectationsforstrongmacroandnorecessionkeepinvestorsinthe"softlanding"campat65%,with"hardlanding"probabilityfadingtojust11%. Notealsoarising%ofinvestorsexpect"nolanding"at19%,upfrom7%inJanandnowhigherthanthe%expecting"hardlanding." Nolanding Hardlanding 11% Feb-24Jan-24Dec-23 05101520253035404550556065707580 Source:BofAGlobalFundManagerSurvey BofAGLOBALRESEA
