Global funds are aggressively increasing their equity investments to record highs amid the war crisis.

A BofA survey indicates that global funds are increasing their equity holdings to a record high, driven by hopes of corporate profit growth and the possibility of a Fed interest rate cut, despite the ongoing economic war.

May 19, 2569 at 13.28:XNUMX a.m., Reuters reported that BofA's May survey of global fund managers indicates that institutional investors increased their holdings of stocks to a record high. This was driven by confidence in corporate profit growth and expectations that the Federal Reserve (Fed) might cut interest rates in the future.

Global stock markets continue to move near all-time highs, driven by strong corporate earnings and continued high demand for artificial intelligence (AI), prompting companies to invest heavily in the field.

This situation occurred even though oil prices remained above $100 per barrel and peace negotiations between the US and Iran remained stalled, a factor that continued to put pressure on global bond markets.

A BofA survey conducted between May 8–14, covering 200 fund managers overseeing more than $517,000 billion in total assets, found that the net percentage of fund managers who held an overweight rating on stocks increased to 50% from just 13% the previous month.

Meanwhile, the average cash level in investment portfolios decreased to 3.9% from 4.3%, reflecting that investors are beginning to shift their funds back into riskier assets.

The survey also found that only 4% of respondents believed the global economy would face a hard landing, or a severe slowdown accompanied by a contraction in employment, while 39% believed the economy would enter a no-landing phase, or not yet slow down significantly.

Additionally, 66% of respondents believe that the shipping bottleneck through the Strait of Hormuz will be resolved within the next few months.

However, investors still view a second wave of inflation as the most significant risk to the market at present, with 40% identifying it as a tail risk, or a major risk that could have a severe impact on the economy and financial markets.

Regarding the bond market outlook, 62% of respondents expect the yield on 30-year U.S. Treasury bonds to rise to 6% from its current level of around 5.14%, while only 20% believe the yield will fall to 4%.

refer : reuters.com

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