Investors are in a risk-on mood: BofA

Investors are in a risk-on mood: BofA
A survey of fund manages shows rising preference for Europe, emerging markets stocks.
MAR 19, 2024

Investors are in a risk-on mood and are snapping up stocks in Europe and emerging markets at the expense of the US and the technology sector, according to Bank of America Corp.’s latest fund manager survey.

Participants had the biggest jump in allocations to European equities since June 2020, and the biggest increase in allocations to developing-nation equities since April 2017, strategists led by Michael Hartnett wrote in a note. Financials were also in favor in the March survey, with the new risk-on preferences coming at the cost of US stocks and the technology and consumer discretionary sectors.

Fund managers are seeking more global exposure as the poll showed risk appetite reached the highest level since November 2021 and an economic soft landing remained the consensus view. Allocation to stocks is at a two-year high, but bullish positioning in the US is elevated, with the survey showing that being long on the Magnificent Seven group of US technology stocks is the most crowded trade.

Investors in the poll were split on whether or not artificial intelligence stocks are in a bubble, with 40% saying yes and 45% answering no.

The survey findings also highlight optimism about global growth expectations, which is at the highest in over two years, according to the poll. Investor bets on global markets have been paying off recently. European stocks have gained over the past eight weeks, outperforming the S&P 500. The MSCI Emerging Markets Index also outpaced the US benchmark’s gains over the same period.

The poll was conducted between March 8 to March 14, spanning 198 participants with $527 billion in assets under management.

Latest News

 Younger Americans fear AI's retirement impact, Thrivent finds
Younger Americans fear AI's retirement impact, Thrivent finds

AI-driven job fears are weighing on retirement confidence, especially among Gen Z and Millennials, Thrivent survey finds

FINRA spanks Centaurus with $1.1 million penalty over variable annuity switches
FINRA spanks Centaurus with $1.1 million penalty over variable annuity switches

It’s the second time in as many years regulators have penalized Centaurus Financial for lack of compliance with Reg BI.

Wells Fargo touts AI Teammate to streamline advisors’ workloads
Wells Fargo touts AI Teammate to streamline advisors’ workloads

AI Teammate is embedded within Wells Fargo’s Advisor Gateway desktop platform.

Advisor moves: &Partners reels in $524M RayJay team, Focus firm Eton Advisors welcomes Northern Trust alum
Advisor moves: &Partners reels in $524M RayJay team, Focus firm Eton Advisors welcomes Northern Trust alum

Elsewhere, Ameriprise added a $470 million Wells team in New York, while an ex-Morgan Stanley advisor bolsters UBS' Austin, Texas office.

The exit planning conversations advisors need to have with business owners
The exit planning conversations advisors need to have with business owners

Financial advisors play an essential role in helping small business owners navigate their transition out of the company — and into retirement.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income