Global investors are pushing into higher risk strategies as rate cut expectations and forecasts for a less severe economic downturn raised the appetite for higher equity allocations in their portfolios.
Despite signs of slowing economic growth in recent weeks, only a net 26% of investors polled in Bank of America‘s monthly Fund Manager’s Survey thought profits would worsen in the next 12 months — the most optimistic profit outlook since February 2022.
This drove an increase in equity allocation, up 13 percentage points to 15% overweight — the highest portfolio allocation of equities in since February 2022. The SPDR S&P 500 (NYSE:SPY), an exchange traded fund that has tracked the senior U.S. equity index, gained 24% in 2023.
