Macroeconomic and market optimism remains “very high”, according to the latest fund manager survey from Bank of America Merrill Lynch.
A ‘taper tantrum’ in bond markets, inflation and higher taxation are seen as bigger risks than the Covid-19 pandemic, the survey found. Only 15% of respondents cited Covid-19 as the biggest tail risk. Taper tantrum was the first risk, at 32%, while inflation was cited by 27% of respondents.
Asked whether Bitcoin was in a bubble, 74% of survey respondents said yes. However, only 7% thought US equity markets were in a bubble. Bank of America said 25% think we’re in an early-stage bull market, while 66% said it was a late-stage bull market.
The survey also found that 85% of fund managers are expecting global profits to improve over the next 12 months, down four percentage points but still near all-time highs.
Banks were the most overweight sector for first time since May 2018, Bank of America said.
The survey was carried out between 6 and 12 April.
