How bullish are asset owners feeling?
The latest fund manager survey by Bank of America found the most bullish sentiment since 2022, with cash levels at historic lows. Do asset owners share those feelings?
Good morning. There are plenty of reasons to be downbeat, if you’re an investor. Just pick up a newspaper and find out whether the Strait of Hormuz is open yet (probably not).
But the latest fund manager survey by Bank of America found the most bullish sentiment since 2022.
Cash levels are at just 3.5 per cent - this is the sixth lowest level in the 28 years that BoA has been running this survey.
Meanwhile global equity allocations have hit their highest level since November 2021.
The consensus in the survey was that there would be no increase in interest rates by the Federal Reserve, no cut in capital expenditure by AI companies and no slowdown in the economy.
A majority of respondents to the survey said they expected a Democratic sweep in this year’s US midterms to adversely affect the stock market, but the consensus was that this wouldn’t happen in any event.
So the good times will just keep on rolling, with 56 per cent of respondents predicting a “no landing” scenario for the global economy (ie one in which the economy continues to grow as central banks raise interest rates):
So the question which inevitably popped into my head was: ‘so, are asset owners just as bullish?’.
If we try to answer this question purely in terms of the amount of cash they are taking off the table then the answer is ‘sort of, but not really’.
Data from our sister title Mandatewire suggests the net amount of cash being allocated by asset owners in most regions has slowed down over the course of 2026.
But of course this just indicates one of two possibilities: the absence of bearishness or a sensitivity towards inflation, in which cash is obviously an asset that only loses value.
True bullishness would involve actually taking the money and putting it to work in equities, for which we would need to see some chunky negative flows.
And there is some evidence of that: notably in Asia (the Q2 2026 number in Asia is distorted by a massive, $6bn allocation to cash by the Taiwan Postal Savings Fund - without this the number is still positive but only slightly).
But on this basis I’m not sure asset owners are being invited to the same parties as fund managers.
