17th Mar 2026 11:30
(Alliance News) - Investor optimism plunged and cash holdings rose as concerns over Iran and private credit increased, a closely watched report on Tuesday showed.
Bank of America's global fund manager survey showed investor sentiment fell to a six month low as fund managers' turned "bearish" ending the "frothy bull" sentiment of recent months.
BofA's broadest measure of fund manager sentiment, based on cash levels, equity allocation, and global growth expectations, dropped sharply to 5.6 in March from 8.2 in April.
But BofA noted this is still well above the "uber-bear" low of 1.8 at the time of April 2025's 'Liberation Day'.
The index has a scale of 0 to 10, with 10 being the most optimistic.
Global growth optimism slumped to net 7% in March from 39%, inflation expectations jumped to net 45% from 9% and rate cut optimism was at its lowest since February 2023.
However, fund managers' are not pricing in recession with the probability of a hard landing just 5%, versus 46% forecasting no landing, and 44% a soft landing.
Nearly half, 45% of investors surveyed, expect higher global inflation in the next 12 months, up from 9% a month ago.
Net 17% expect lower short-term interest rates, down from 46% a month ago, and 78% in August 2025. It is the lowest reading since February 2023.
Geopolitics and inflation replaced AI bubble as biggest tail risks, with 63% of fund managers seeing private equity/credit as the most likely source of a systemic credit event.
Fund manager cash levels jumped sharply to 4.3% in March from 3.4% last month, and the 3.2% record low in January, the biggest jump since March 2020.
Asked about the oil price, just 11% of investors expect Brent oil price to be over USD90/barrel by the year-end.
BofA said a fund manager survey measure of credit default risk rose sharply with net 46% of investors saying the risk is above normal, up from 17% in February, the highest level since April 2025.
Net 24% of investors are underweight the US dollar, less than last month's 28%, with net 34% overweight commodities, the most since April 2022.
In March, a net 53% were overweight emerging market equities, the highest since February 2021.
In March, investors are most overweight emerging markets, healthcare, equities, and commodities versus most underweight bonds, consumer discretionary, and US dollar, BofA said.
BofA said 181 participants with USD529 billion assets under management responded to the Global FMS survey.
By Jeremy Cutler, Alliance News reporter
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