- Global investors stay “uber-bullish” but asset price upside in Q1 is harder
- Commodity overweight at highest since May 2022
- Equity overweight at highest since December 2024
- Most optimistic on earnings since August 2021, but investors saying companies are “overinvesting” at new record
- AI bubble is top tail risk
- Long gold is the most crowded trade
- Record shorts on US dollar, most bearish since 2012
The Bank of America Global Fund Manager Survey (FMS) is one of the most influential monthly reports in the financial world. It polls roughly 200 to 400 institutional fund managers (people managing hundreds of billions of dollars in hedge funds, pension funds, and mutual funds) to see how they are positioned in the markets.
It’s useful as a contrarian indicator. In fact, when positioning gets overstretched on one side or the other, the risk of aggressive unwinding increases. We’ve seen what happened with precious metals recently as silver plummeted by 47% in just a week. Complacency is punished in the markets. There’s generally a catalyst triggering the reversals or just multiple factors signalling an inflection point.
For example, traders have been very bearish the US dollar due to the de-dollarisation narrative (not supported by the data) and very dovish expectations for the Fed’s interest rate path. The greenback could actually bounce back in 2026 with improving labour market or just with the other major central banks getting more dovish due to weakening data.
This article was written by Giuseppe Dellamotta at investinglive.com.