Global fund managers have been adjusting their portfolios in reaction to rising geopolitical unrest and a slowdown in economic growth.
According to the Bank of America Global Fund Managers survey, cash allocation rose sharply in March, the biggest jump since March 2020.
In March, cash allocation stood at 8% overweight, compared to a net 4% underweight in February and 13% underweight in January.
The survey also showed a clear change in investor sentiment. The composite sentiment index, which tracks fund managers’ cash levels, equity allocations and global growth expectations, fell to a six month low of 5.6 in March, compared to 8.2 in February
Just 7% of respondents are looking for stronger economic growth this year, compared to 39% and 38% of respondents in February and January respectively.
Expectations of inflation have also risen sharply, a net 45% of respondents are looking for higher global inflation in the year ahead, compared to just 9% in February.
A more bearish approach can be seen in managers’ portfolios in March with many switching to less risky asset classes.
According to the survey, 37% of canvassed managers were overweight on global equities, compared to 48% in January and February.
Allocations to bonds dropped slightly while allocations to real estate remained unchanged but there was an increase in allocations to commodities, net 34% overweight in March, compared to 28% overweight in February.
Respondents were also polled on the top tail risks, with geopolitical conflict (37%), inflation (23%) and private credit (16%) emerging as the top three. In February, the top tail risk was an AI bubble (25%).
Concerns about private credit also increased in March with private markets identified as the most likely source of a systemic credit event for the eighth month in a row.
The survey also polled managers about the expected price of crude oil – the weighted average is $76/bbl by the end of the year
The survey canvassed 210 panelists with $589 billion in assets under management between March 6 to March 12, 2026.
