By Saikat Chatterjee

LONDON (Reuters] – Fund managers’ optimism over global growth is at an all time low while worries about a stagflationary world have risen to their highest level since August 2008. This was according to a BoFA Securities monthly poll.

This survey, which surveyed firms with assets of over $833 billion each, was one of the most frequent tests of fund managers’ views. It comes at a time when inflationary pressures are rising even though the likelihood of recession in major economies is increasing.

Respondents were asked to predict global growth over the next few months. It was the largest percentage of responses since early 1990s.

The survey revealed that although fund managers’ cash holdings, which are traditionally indicators of investor caution, fell to 5.5% from 5.9% the month before, there is still a high “tail risk” of global recession.

Fourth place has been taken by the Russia-Ukraine war.

Record 38% of all commodities allocations were made. Investments into oil and commodities rose to the top, becoming the “crowded trade” most in demand.

BoFA stated that other “long” positions could be found in healthcare and resources stocks, and “short” investments – made by investors anticipating a fall in prices – were seen in bonds and cyclical stock whose performance is closely linked with economic growth.

Respondents to the survey expected the U.S. Federal Reserve would raise interest rates up to seven times during the current cycle, in comparison to the four-times in previous editions. The majority of investors expect inflation to fall over the next 12 month period.

BoFA stated that global profit expectations fell to their lowest levels since March 2020.

Investors were more bullish about U.S. equity allocations than they were on European or UK stocks.

Surveys were conducted from April 1 through April 7.