The past month has seen the biggest single withdrawal of fund manager allocations from US stocks on record, according to the latest monthly fund manager survey from Bank of America.
Institutional investors went from a net 17% overweight on US equities in February to a net -23% in March amidst what BofA called a "bull crash" in fund manager sentiment.
March also saw the second-biggest drop in global growth expectations ever and the biggest jump in cash allocation since March 2020.
It noted that in the past three decades of the survey, such a bull crash has coincided with the end of equity corrections.
“That said, no one is long recession/bonds” and survey positioning is “nowhere near extreme bear/close-yor-eyes-and-buy levels”.
Contrarian trades were noted, with bulls expecting trade war and stagflation concerns to unwind were taking long positions (ie buying) stocks and short cash, or long on tech stocks and short on staples, while bears expecting US recession risks to increase were long bonds and short banks and Europe.