Global fund managers afraid to miss out on AI frenzy
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ALMOST nobody wants to miss out on the brisk rally in US tech.
That’s the broad consensus from Bank of America’s (BofA) latest global survey of fund managers, which showed investors are “exclusively long” on tech stocks amid the buzz around artificial intelligence (AI). Long Big Tech was the most crowded trade, according to 55 per cent of the participants, the strongest conviction since 2020.
Still, fund managers remain broadly underweight on stocks as sentiment – measured by cash levels, economic growth expectations and asset allocation – remains “stubbornly low,” BofA strategist Michael Hartnett wrote in a note. Investors cut equity allocation to a five-month low.
The frenzy around AI and bets of a pause in central-bank interest-rate hikes helped lift the S&P 500 into a bull market last week.
Fresh figures on Tuesday (Jun 13) showed US inflation slowed in May, supporting the case for Federal Reserve officials to pause their tightening campaign this week.
Caution, however, prevailed in the survey, which showed that 59 per cent of participants do not think the Fed is done raising rates yet.
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That is a sharp reversal from the previous month, when 61 per cent indicated the central bank had delivered its last hike.
Participants are optimistic about the impact of AI over the next two years, with 40 per cent expecting it to drive corporate profits higher, Hartnett said.
The survey was conducted from Jun 2 to 8 and canvassed 247 participants with US$708 billion in assets under management. BLOOMBERG
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