Quick Bite – What are Global Fund Managers Thinking?
Regular QB readers will know that we periodically review the Bank of America Global Fund Manager surveys – they seem to capture the “prevailing narrative” in investment markets in a timely and useful manner. The latest BoA Survey is one of the most bearish on record, after global growth expectations collapsed to 30-year lows on US president Donald Trump’s trade tariffs.
The survey polled 164 investment professionals running a total of $386bn and was carried out between 4 and 10 April – when markets were reeling from the ‘Liberation Day’ tariffs unveiled by Trump on 2 April.
So, what is the survey saying during this period of heightened uncertainty and volatility?
Interestingly, we currently see the fifth most bearish positioning in the past 25 years as tariffs drive global growth expectations to 30-year lows. The outlook for US stocks is the worst since 2006. Therefore, applying the contrarian rationale that often proves so prescient, the implied trade is currently to be long US stocks, and especially US tech stocks.
Source: Bank of America GFMS
Which sectors are global fund managers favouring, and which sectors are they avoiding? As expected during periods of “risk off”, fund managers are seeking shelter in utilities, bonds and staples, and running away from tech, energy and industrials. This makes sense if the expectation is that the tariff shock could lead to higher inflation expectations.
Source: BoA GFMS
Probably the biggest market fear now is the toxic mix of slower growth and higher inflation – stagflation. Fund managers expect higher inflation while short-term rates should continue to drop as the economy falls into the tariff torpor. That is a bad mix and would be a prelude to recession. Even with Trump’s attempts at intimidating Chairman Powell, the Fed will struggle to cut rates if inflation is surging once again.
Source: BoA GFMS
The broadest measure of fund manager sentiment, which looks at their global growth expectations, equity allocations and cash balances, fell to 1.8 in April, down from 3.8 in March and the lowest level since October 2023.
Source: BoA GFMS
Expectations for the global economy fell to a record low in April, with 82% of asset allocators expecting weaker global growth (44% in March).
A net 42% of investors now expect a global recession, which is the most since June 2023 and the fourth highest level of the past 20 years. Bank of America’s strategists noted that this is a “big flip” from March, when 52% said a recession was unlikely.
Meanwhile, managers’ average cash levels rose to 4.8%, up 125 basis points since February 2025. This is the largest two-month increase since April 2020.
Source: BoA GFMS
Last word goes to gold… which is expected to be the best performing asset in 2025, favoured by 42% of fund managers. This is up from 23% in March and reflects the strong rise in the precious metal as investors sought out safe havens during tariff volatility.
