Bulls Back in Town: Fund Manager Optimism at 7-Month High
- Girish Appadu
- Sep 17
- 1 min read
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?
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