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By Lucy Raitano

LONDON, Aug. 16 (Reuters) – Investors remain bearish, but are no longer in “apocalyptic” mode, Bank of America (BofA) monthly survey of global fund managers said in August, on expectations for it in the coming quarters of a possible surprise on inflation and interest rates. end.

BofA, which surveyed investors who watched over $836 billion in assets between Aug. 5 and 11, said Tuesday it had cut its net underweight position in equities to less than 26%. This is an increase from a low of minus 44% recorded in July, a level last seen in the 2008 global financial crisis.

However, fears of an economic slowdown continue to mount: 58% of investors expect a global economic recession in the next 12 months, up from 47% last month and the highest reading since May 2020.

The proportion of cash not invested in the portfolio fell to 5.7% from 6.1% in July, but remains “very high”, said BofA.

Stocks have rebounded in the last two months after a brutal first half of 2022 and the BofA said August saw a big rotation to US stocks, technology and consumer stocks as investors sold defensive stocks such as utilities and consumer staples, as well as UK stocks.

US stocks have risen about 12% in the last month, but are still down close to 10% so far this year.

The recent US inflation data was better than expected, suggesting that the Federal Reserve will not raise rates as aggressively as investors had hoped.

Despite improving investor sentiment, Bofa said the survey showed the Bull/Bear indicator (bullish/bearish) remained at “high” levels.

(Edited in Spanish by Ricardo Figueroa)