Bank of America’s November Fund Manager Survey reveals a sharp shift in global investor positioning. With cash levels falling to just 3.7%, investors are now heavily exposed to equities, commodities, and technology-led trades. The survey highlights growing concerns about overvaluation, crowded positions, and the risk of a market correction if the U.S. Federal Reserve does not cut rates in December.
What Is the BOFA Fund Manager Survey?
The survey tracks the views of professional money managers worldwide. In November, Bank of America collected responses from 172 fund managers overseeing $475 billion in total assets. Their opinions offer insight into how global markets may behave in the coming weeks.
Key Highlights From the November 2025 Survey
1. Cash Levels Fall to 3.7% – A Bearish Signal
The average cash balance dropped to 3.7%, one of the lowest readings in years. According to BOFA, such low cash levels often act as a “sell signal” because investors have little liquidity left to support markets during volatility.
2. Emerging Markets and Banks Most Vulnerable
Fund managers believe emerging markets and global banking stocks face the highest downside risk if a full Q4 risk-off move begins. Without a Federal Reserve rate cut in December, these sectors could see sharper corrections.
3. Investors Most Overweight Stocks Since February 2025
Global portfolios are now the most overweight equities since February 2025. Commodity exposure is also at its highest level since September 2022, showing broad risk-on sentiment despite macro uncertainties.
4. Magnificent 7 Still the Most Crowded Trade
A large share of managers 54% say “Long Magnificent 7” remains the most crowded trade in global markets. This concentration increases vulnerability to sharp corrections if technology stocks pull back.
5. AI Bubble Identified as Biggest Tail Risk
Around 45% of respondents point to a potential AI bubble as the biggest market risk. High expectations around AI-driven revenues and hyperscaler spending could create volatility if growth slows.
6. First Time in 20 Years: Investors Say Companies Are Overinvesting
For the first time in two decades, fund managers believe companies are “overinvesting”. This suggests that corporate capex, especially by major tech players and hyperscalers, may need to cool down in 2026.
Why This Matters for Investors
The survey signals that markets are entering a sensitive phase. Low cash levels, crowded tech trades, and high expectations leave little margin for bad news. If the Fed chooses not to cut rates in December, the risk of a deeper correction increases, especially for emerging markets and banks.
Frequently Asked Questions
What does a 3.7% cash level mean?
It indicates investors are holding very little cash. Historically, such readings are seen as bearish because markets have less liquidity support during downturns.
Why are emerging markets at risk?
They react more strongly to global risk-off moves, rising U.S. yields, and slower growth expectations.
Why is the AI bubble a concern?
High valuations and aggressive investment by tech companies can reverse quickly if revenue expectations fall short.
Conclusion
BOFA’s November survey sends a clear message: investor positioning is heavily bullish, but this bullishness itself has become a risk. With low cash levels, crowded trades, and uncertainty around December rate cuts, markets may see more volatility before stabilising.
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