Key Points
- Global fund managers report their most bullish stance since mid-2021, with cash at a record low.
- Stock-market “insurance” has thinned sharply, leaving portfolios more exposed if prices suddenly swing.
- Geopolitics, not an AI bubble, is now seen as the biggest tail risk, with long gold a crowded trade.
Global investors have moved into a rare mood of confidence, according to Bank of America’s January fund manager survey. Managers describe stronger growth expectations and fading recession anxiety.
At the same time, they are holding less cash and less downside protection than in years. The survey, run from January 8 to 15, gathered responses from 96 participants overseeing about $575 billion. The headline number was cash.
Average cash levels fell to 3.2%, the lowest on record in the series. That is a classic sign that many portfolios are already fully committed. BofA’s Bull & Bear indicator jumped to 9.4, a level the bank calls “hyper bull.”
Investors also reported the least protection against an equity correction since January 2018. Nearly half said they had no hedges against a sharp stock-market decline. In simple terms, many are choosing performance over insurance.
Economic confidence supports risk-taking
Confidence is tied to the economic outlook. A net 38% expect a stronger economy, and recession fears slipped to a two-year low. A “no-landing” scenario has become the base case for many respondents.
That means growth stays firm even as inflation pressures ease slowly. Liquidity conditions were viewed as the best since 2021. When liquidity feels plentiful, risk-taking rises.
That can support rallies, but it can also make reversals faster when positioning becomes one-sided. The survey also reshuffled perceived risks. Geopolitics overtook an AI bubble as the leading tail risk.
The most crowded trade was long gold, suggesting many want an exit route if shocks hit. Timing matters. The poll ended before fresh trade threats and political brinkmanship re-entered headlines.
That gap highlights how quickly “risk-on” narratives can collide with policy surprises. The findings spread quickly online. X users circulated the “record-low cash” and “hyper bull” labels as a warning sign.
Instagram and Facebook finance accounts echoed the same metrics, often framing them as late-cycle behavior. TikTok checks were limited by access restrictions.
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