Bank of America (NYSE:BAC) Survey Investors Bullish on Equities

A survey by Bank of America (NYSE:BAC) of 188 fund managers, managing $569 billion, found they're the most bullish on global equities than they have been in a decade.

Taking into account the enormous risk in equities and valuations, it's incredible that 67 percent of those responding to the survey are overweight on global equities; the highest levels since Bank of America started the survey in 2001.

Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research said, “The surge in equity and commodity weightings, uber-low cash levels, rising inflation expectations and crashing EM allocations indicate that we are no longer in a Goldilocks environment. A jump in rates or weaker growth are the most likely catalysts for a spring correction.”

“Unusually, higher risk appetite has been accompanied by a dramatic downsizing in asset allocation to emerging markets, as surging global growth expectations have increased the value attractions of developed market alternatives,” added Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research.

In December the percentage was 40 percent and in January, 55 percent.

Fund managers have been fleeing bonds as well, with 66 percent now underweight bonds in contrast to 54 percent in January.