Fund managers responding to the latest Bank of America Merrill Lynch (BofAML) survey are forecasting a spike in volatility in the first quarter of 2018, as overweight positions in equities climbed to a two-year high.
In its latest monthly global survey, which questioned 213 fund managers with $591bn in assets under management between 5 and 11 January, cash balances fell to a five-year low of 4.4% down from 4.7% in December, while allocations to equities jumped to a two-year high of a net 55% overweight position. In addition, 30% of investors did not expect a peak in equity markets until 2019 or beyond and the number of investors taking out protection against a near-term correction fell to the lowest level since 2013, at net -50%. The report said "bull capitulation means a volatility spike is immin...
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