Fund managers are more bullish in November, with higher global growth expectations shown by those surveyed following the announcement the U.S. presidential election results, according to the results of Bank of America’s latest Global Fund Manager survey.
In the survey of 213 fund managers overseeing a total of $565 billion in assets, the broadest measurement of sentiment — which is based on cash levels, economic growth expectations and equity allocations — fell to 5.2 from 5.5 in November when analyzing all the surveys completed by fund managers between Nov. 1 and Nov. 7.
However, that broadest measure of sentiment rose to 5.9 when analyzing only the surveys completed between Nov. 5 and Nov. 7, following the announcement of Donald Trump’s victory in the U.S. presidential election.
Bank of America said about 22% the total 213 fund managers completed the survey following the U.S. election, or about 47 managers.
Cash levels, however, rose to 4.3% in November from 3.9% in October. Among the 47 managers who completed the survey after the election, the cash level still rose, but slightly less, to 4%.
There was continued improvement in global growth expectations over the next 12 months. Among all 213 managers, expectations improved to a net 4% expecting a weaker global economy from a net 10% in October. However, among the 47 managers who completed the survey after the election, expectations skyrocketed to a net 23% expecting a stronger global economy over the next 12 months.
When asked for the most likely outcome for the global economy over the next 12 months, 63% of respondents said “soft landing,” (down from 76% in October) while 25% said “no landing” (up from 14%) and 8% said “hard landing” (the same as in October). The remaining 4% responded with other unlisted answers.
Among the 47 managers who responded following the U.S. election, 55% said “soft landing” and 33% said “no landing,” with the remaining 12% responding with unlisted answers.
Among the 47 postelection managers, inflation expectations increased to a net 10% expecting higher inflation from a net -44% in October. Among all managers, the number rose to a net -16%.
When asked what the biggest tail risk is, 32% of all managers said a global inflation scenario (up from 26% in October), and that was followed by 21% of managers saying geopolitical conflict. Managers also cited a U.S. election sweep (one party taking both the White House and Congress), U.S. recession and systemic credit event as tail risks, but Bank of America did not provide specific percentages.
