Investment Risk: Global investors are the most risk-on in 15 years: BofA Survey

Fund managers‘ cash levels fell to the lowest since 2010, while 34% of participants said they expect world equities to be the best-performing asset in 2025, the survey showed. A net 11% indicated they were underweight bonds.

Investors are “long stocks, short everything else,” strategist Michael Hartnett wrote in a note. The bullishness was underpinned by expectations of robust economic growth and lower US interest rates this year, he said.

Global equities have rallied over 60% since a low in late 2022 on optimism around artificial intelligence as well as signs that a US recession had been averted. The rally had been driven by a narrow group of US technology stocks, and investors are now flocking into cheaper European equities.

About 89% of respondents in the BofA survey said US equities were overvalued, the most since at least April 2001. The faith in so-called US exceptionalism – where investors bet mainly on American financial markets – has also faltered as investors rotate into European stocks.

The Euro Stoxx Index is expected to outperform the US technology-heavy Nasdaq 100 this year, the survey showed. The European gauge has already surged 12% in 2025, while the Nasdaq 100 has advanced 5%.Overall investor bullishness – as a measure of cash levels, equity allocation and global growth expectations – rose to 6.4 from 6.1, although it remains below the “frothy” levels seen in December 2024.Global recession expectations fell to a three-year low, while about 77% of fund managers expect the Federal Reserve to cut rates in 2025, survey showed.