More investors think US equities are overvalued than at any other time since 2000 and asset allocators have their biggest underweight to US equities since 2008.
In contrast, a net 63% of respondents to the BofA Merrill Lynch Fund Manager Survey say Europe is the region they most want to overweight in the next 12 months, a record since this question was first asked in the survey in 2001.
“Bullishness towards European stocks has reached uncharted territory,” says Manish Kabra, European equity and quantitative strategist, BofA Merrill Lynch Global Research.
The pessimistic attitude to US equities in the March survey was linked to beliefs the US Federal Reserve would raise interest rates in the second quarter of the year.
Meanwhile, the clamour for eurozone equities is likely to be caused by the European Central Bank’s quantitative easing programme and a slide in the value of the euro.
A total of 207 fund managers with a combined $565 billion (€529 billion) under management participated in the March survey, which was carried out in partnership with research firm TNS.
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