Fund Managers Are All-In on Stocks (Bank of America Survey)
Institutional investors are nearly all-in on stocks, according to Bank of America’s June Global Fund Manager Survey. Its main sentiment gauge has even flashed a “sell signal” – a level that’s lined up with past market tops. It seems the pros are all-in on stocks, but should you be too?
What the Bank of America (BoFA) fund manager survey says
Every month, Bank of America asks around 200 professional money managers how they’re investing. So it’s a good look at what the “smart money” are doing with their cash.
Right now, fund managers are mostly in stocks – and holding just 4.1% of their portfolios in cash. That cash level is relatively low compared to the past 20 years of survey data. It gives them less fire power left to buy any dips in the market.
BoFA also runs a “Bull & Bear” sentiment gauge that scores how bullish the pros are from 0 to 10. It just hit 8.9 – a level BofA calls a “sell signal.” The last few times it got this high, the market wasn’t far from a top.
Here are the BoFA June survey highlights:
| Survey reading | What it means |
|---|---|
| Cash at 4.1% | The pros are nearly fully invested. There's not much dry powder left to buy the next dip. |
| Bull & Bear gauge at 8.9 | BoFA's own investor sentiment gauge has flipped to a "sell signal." |
| Semiconductors named the most crowded trade (80%) | A record 80% agree that semiconductor stocks are the most crowded in the market right now – the chip makers riding the AI boom. |
| A second wave of inflation is the top fear (34%) | Their biggest worry is inflation coming back for round two. That could keep interest rates high – and rising rates and stocks don’t always get along. |
| AI bubble fear jumps to 28% (from 5%) | Two months ago almost nobody called AI a bubble. Now nearly a third do – but they're still buying it anyway. |
| 55% expect a "hawkish hold" from the Fed | Most reckon the US Federal will sit on its hands and keep interest rates the same. |
So should you be all-in stocks too?
These fund managers are pretty much all-in on stocks – but they’re also getting nervous. Inflation, an AI bubble, and a Fed that won’t cut interest rates are all on their worry list.
That said, BoFA doesn’t think this is a “big top” yet – and most managers agree. Asked where AI stocks are in the cycle, 56% said the boom stage – where the fear of missing out pulls in more buyers. Only 21% said euphoria (or the danger zone).
Still, there’s a time and a place to be “all-in” on stocks, and the boom stage isn’t it. It could pay to keep some cash on the sidelines for a rainy day – at least more than most fund managers.
As usual, none of this is investment advice. To learn more about how market cycles work, check out our Market Cycle Investing guide.
