Fund managers are at their most bullish since February and say there is no longer a bear market rally.
However, only 17% expect a V-shaped recovery, with most (37%) predicting a W-shaped recovery.
The figures are from the latest Fund Manager Survey published by Bank of America, which had 203 respondents who manage $518 billion (€436.8 billion) of assets in total.
Bullishness is “far from dangerously bullish”, said the report, which reveals there was more investment in EU and emerging market stocks in August. Eurozone stocks were highest overweight region, though allocations are still “stubbornly” skewed to US growth stocks.
Similarly, the survey also notes exposure to value and small caps is low, with US tech and gold the most crowded trades.
Nearly 80% of the managers expect higher growth – the highest reading since December 2009 – suggesting there is no longer a bear market rally.
An announcement about a vaccine for Covid-19 is generally expected in the first quarter of 2021, the survey revealed.
However, chief investment officers want CEOs to reduce debt (57%), not expand capital expenditure (30%), and investors believe stocks, bond and gold are the most overvalued since 2008.
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