Market Overview

Funds Are Holding The Most Cash Since 2001

Funds Are Holding The Most Cash Since 2001
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Investors are holding the most cash since 2001, according to a new report this week. Bank of America's investment global strategy team, led by Michael Hartnett, shared findings of a new global fund manager survey on Tuesday.

Funds' focus on cash holdings was the top takeaway Hartnett and his team discovered; data shows 5.6 percent of assets under management by those surveyed were in cash, the highest since November 2001. That's an "unambiguous “buy” signal," Hartnett added.

Among the other takeaways BofA found:

  • Investors want to preserve capital, rotating into cash, bonds, telecoms and utilities, and out of banks and other stocks.
  • Fund expectations of global growth and profit are both negative for the first time since the summer of 2012.
  • Chinese growth expectations are the lowest since December 2008.
  • Funds are becoming more bullish; 20 percent see 10-year yields lower in the next year, up 16 percentage points in 6 months.
  • The most crowded traders are long F.A.N.G. (Facebook Inc (NASDAQ: FB),, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX) and Alphabet Inc (NASDAQ: GOOG)), short emerging markets, short oil and long the U.S. dollar.
  • "Stubborn" short sellers remain in energy, emerging markets, materials, industrials and commodities names.

Here's how much cash fund managers are holding.


Here's what managers were rotating in and out of in February.


And last but not least, the majority of managers now say the U.S. economy is late in its economic cycle, the first time that's been the majority since 2012.


Latest Ratings for FB

Feb 2018ArgusMaintainsBuy
Feb 2018BMO CapitalMaintainsMarket PerformMarket Perform
Feb 2018Morgan StanleyMaintainsOverweightOverweight

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