BoFA Survey Reveals Fund Managers Are Moving Towards Stocks
It seems the month of February has improved the investor's appetite, and the sentiment has also turned optimistic. As a result, fund managers are slowly reducing their cash holdings and putting the money to use by investing in equities.
Earlier, the rising geopolitical tensions and especially the Ukraine war made the fund managers sell stocks and increase their cash holdings.
But as per the new survey from BofA, the situation seems to be improving as the fund managers are now buying equities once again.
24% Chance Of Recession
Earlier, around 77% of the fund managers were predicting that a recession was highly likely. But now, only 24% of fund managers believe that recession is around the corner!
This was revealed in a survey that contained the opinion of 299 fund managers. Collectively, these fund managers have $847 billion worth of assets under management.
The survey also revealed that investors are still cautious, but the level of that caution has gone down significantly!
Overall, the investors are still overweight on net cash and less exposed to equities. But it seems that this trend is now changing slowly as the cash holdings are slowly reducing.
However, the survey does show that investors are not as pessimistic as they were just a few months ago. In addition, all the key indicators of sentiment have also improved. Similarly, the risk appetite is shifting towards more favorable conditions, which is a good thing for the markets.
But we also have to consider the fact that we are only a few weeks into 2023. And the situation on the ground is still very hot - From the Ukraine war to high energy prices, there's still a lot that can disturb the markets. Similarly, the rates are also at record high levels, which will also put a drag on the equity markets.
However, some rate cuts later in the 2023 will most definitely put a boost to the equity markets around the world!