Risk Appetite Surges, But Are Investors Overlooking Fragility?

The latest Bank of America Fund Manager Survey (Q2 2025) shows investors leaning harder into risk than at any point this year:

Cash levels: Near-decade low at 3.9%

Global equities: Net 14% overweight

Soft landing hopes: 65% expect it, just 9% fear a hard landing

Optimism is running high, powered by AI-driven productivity hopes, easing trade tensions, and expectations of Fed cuts.

But history warns: when confidence is unanimous, complacency creeps in.

3 Fragile Lines Beneath the Rally:

1. Overvaluation anchoring – 91% say U.S. stocks are overvalued and yet remain overweight.

2. Crowded trades – Heavy bets on the “Magnificent 7” and record short positioning in the USD.

3. Policy & geopolitical risk – Inflation surprises or renewed trade tensions could flip sentiment fast.

   
   

Intrasia Wealth – Strategic Considerations

At Intrasia Wealth, we believe that even in optimistic markets, prudent positioning is essential. Key principles to navigate the current environment include:

• Maintain balanced diversification – Avoid over concentration in any single sector or theme, no matter how strong recent performance has been.

• Manage currency exposures thoughtfully – Currency movements can shift portfolio outcomes; consider measured hedging or diversification where appropriate.

• Stay alert to changing market sentiment – Monitor volatility and other risk indicators to anticipate shifts rather than react to them.