Fund managers 'unambiguously' bullish says BofA, Bitcoin in a bubble
By Alexander Bueso
Date: Tuesday 18 May 2021
(Sharecast News) - Global fund managers were "unambiguously" 'bullish' in May although there was a "hint" of defensiveness in the air, said equity strategists at Bank of America.
According to the results of their latest monthly fund manager survey, a record 69% of managers was expecting "above-trend" growth and inflation.
Tied to the above, at 4.1% of portfolios, cash levels were described as "low and steady".
But rising asset allocations towards commodities and cash betrayed a hint of defensiveness, BofA said.
So too sector positioning towards "late cycle" banks and Basic Resources which were now above their 2006 highs.
Regionally, the euro area was the biggest 'overweight' and, intriguingly, investors had gone 'long' UK stocks for the first time since July 2012.
BofA also noted how Bitcoin was the most crowded long trade, citing 43% of the fund managers canvassed, while 75% described it as a 'bubble'.
As well, the broker highlighted how prior peaks in crowded trades, such as in Technology in September 2018 and 2020, or US Treasuries in March 2020, had been associated with tactical 'tops' in relative performance.
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