Two in three fund managers think we are still in a bear market, the latest Bank of America Fud Manager Survey shows. They expect another market correction later this year, most likely caused by a second wave of Covid-19 infections.
Just one in ten fund managers still expect a V-shaped equity market recovery, though markets have rallied by up to 30% since reaching the bottom on 23 March when the Federal Reserve dramatically increased it quantitative easing programme. The S&P 500 is trading only around 10% below February’s all-time high.
Fed President Jerome Powell warned last week, however, that the economy may not recover from the coronavirus crisis until the end of next year. As a consequence of this economic uncertainty, fund managers prefer ‘corona-proof’ investments such as tech and other growth stocks. At the same time, they have also increased their cash positions to 5.7%, considerably higher than the 10-year average of 4.7%.
The survey included responses from 194 fund managers, who run combined assts of $600 billion.