Global investors increased their equity and commodity positions in November, while cash ratios fell to 3.7%, creating a strong sell signal according to Bank of America’s (BofA) monthly fund manager survey. This indicates that overly optimistic positioning could turn into potential downward pressure on risky assets.
Global investors increased their equity and commodity positions in November, while cash ratios fell to 3.7%, creating a strong downward pressure on markets in the last quarter of 2025.
The survey warned that if the Fed does not cut interest rates in December, there could be additional downward pressure on markets in the last quarter of 2025.
It was noted that emerging markets and banks, in particular, are seen as among the most vulnerable segments in a potential risk-aversion environment.45% of participants cited the AI bubble as the biggest tail risk. A record number of investors also pointed out that companies are “over-investing,” suggesting that giant technology infrastructure providers may need to slow their spending. Technology remains one of the most crowded positions; 54% of participants identified a “long position in the Magnificent 7” as the tightest trade.
According to the survey results titled “Cash poor, capex rich, rate-cut needy,” investors have a net overweight of 34% in global equities; this is the highest level since February. In commodities, the strongest overweight since September 2022 is noteworthy. Macro expectations improved in November; global growth forecasts turned positive for the first time this year, while 53% of investors expect a soft landing. However, a record 63% believe equity markets are overvalued. When asked about the most likely source of a systemic credit crisis, 59% of participants pointed to the private equity/private credit sector, revealing the highest risk perception since 2022. The survey was conducted between November 7-13 with 172 fund managers managing $475 billion.
