BofA Report Reveals Challenges Amid Extreme Bullish Market Sentiment

Market Sentiment Remains Bullish

The latest 'Global Fund Manager Survey' by Bank of America reveals that investor sentiment remains extremely bullish. However, this widespread optimism has also brought new challenges.

Challenges in the First Quarter

With most investors already positioning for gains in Q1, further upward momentum in asset prices is becoming more difficult. The survey shows that over-allocation to commodities has reached a net 28%, the highest level since May 2022.

Equity Allocations at Elevated Levels

• Equity over-allocation has risen to a net 48%, the highest since December 2024.
• Under-allocation to bonds has reached a net 40%, the highest since September 2022.
• Cash holdings have only slightly recovered from the record low of 3.2% to 3.4%.

These figures indicate strong investor confidence, but they may also signal increased market volatility ahead.