Bank of America’s latest Global Fund Manager Survey highlights a decisive shift in sentiment this September. Investor confidence is climbing, and portfolio positioning is following suit.
- Equities – A net 28% of managers are overweight stocks, the highest since February.
- Growth outlook – The sharpest improvement in nearly a year, with only 16% expecting weaker growth (down from 41% in August).
- Cash levels – Steady at 3.9%, reflecting a willingness to stay invested.
- Crowded trades – Long Magnificent 7 (42%), Long Gold (25%), Short USD (14%), Long Crypto (9%).
- Tail risks – A second inflation wave (26%) and concerns over Fed independence / USD debasement (24%).
But here’s the striking contrast: a record 58% of managers now view global equities as overvalued, the highest reading since the survey began in 1998.
This creates a clear dichotomy:
- Investors see valuations as stretched, yet risk appetite and allocations continue to rise.
- Momentum and “fear of missing out” are overpowering caution for now.
Structural forces remain in play.
Nearly half of respondents see AI already driving productivity gains, with three-quarters viewing it as a deflationary influence. Thus, reinforcing its role as a long-term growth driver.
Looking ahead, expected Fed rate cuts and resilient corporate earnings are supporting a constructive backdrop into year-end. That said, stretched valuations and policy uncertainty underscore the importance of discipline.
For us, the central question remains: Do fundamentals rise to meet valuations, or will valuations eventually revert to fundamentals?
Source: Bank of America Global Fund Manager Survey - September 2025
Source: Bank of America Global Fund Manager Survey - September 2025
This article is general market commentary, not investment advice or a personal recommendation. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Written and reviewed under our editorial standards.
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