Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial resources to absorb any losses arising from applying these ideas or strategies. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 24 to 26. Global Fund Manager Survey Magnificent Sentiment BofA February Global Fund Manager Survey Bottom Line: most bullish FMS in 2 years, cash levels cut to 4.2% from 4.8% as global growth expectations hit 2-year highs and investors go all-in on US tech; BofA Bull & Bear Indicator at 6.8…investor positioning increasingly a headwind for risk assets. On Macro: for first time since Apr’22, investors not predicting recession (Chart 1), global growth optimism highest since Feb'22 (net -25%); asked for path of economy this year, 2/3 of investors say "soft landing," 1/5 say "no landing," 1/10 say "hard landing." On Policy: lower interest rates the catalyst for optimism: just 4% expect higher short rates, just 7% expect higher inflation and 85% say yield curve will steepen; note record 46% say fiscal policy "too stimulative." On Crowds & Leaders: “long Magnificent 7” most crowded trade since "long US$" in Oct'22 (= big inflection point); “short China stocks" 2nd most crowded trade and 1/4 say structural UW of China is right strategy; leadership of US equity bull: 41% say "large cap growth," 18% "small cap growth," 12% "small cap value,” 11% “large cap value.” On AA: global equity allocation at 2-year high, allocation to US stocks highest since Nov'21, to tech sector highest since Aug'20, to growth>value highest since May'20; investors cut cash, commodities, EM, defensives & energy stocks (lowest since Dec'20). FMS Contrarian Trades: for "hard landing" – long cash, defensives & short US/Japan & tech stocks; for "no landing" – long commodities, energy, US$ & short bonds. Chart 1: BofA FMS Expectations of Global Recession Net % of FMS investors say global recession likely in the next 12 months Source: BofA Global Fund Manager Survey BofA GLOBAL RESEARCH Mar'09Apr'20Nov'22Feb'24-120-80-4004080120'06'07'08'09'10'11'12'13'14'15'16'17'18'19'20'21'22'23'24Net % Saying Recession Likely13 February 2024 Investment Strateg...
