The highly anticipated Bank of America fund manager survey has been published, and this December fund managers who participated in the survey are sweeping up risk assets. The asset managers have dropped cash for the first time in close to seven years, as levels are down 4%. Moreover, strategists at Bank of America Corp. now say the most crowded trades are â€œlong tech,â€ â€œshort USD,â€ and â€œlong Bitcoin.â€
Cash assets are under by 4%, according to the latest Bank of Americaâ€™s fund manager survey published this week. Participants in Bank of Americaâ€™s (Bofa) survey collectively oversee $535 billion in assets worldwide. Bofaâ€™s survey shows that investors are very positive about the coronavirus vaccine bolstering the economy.
â€œInvestor sentiment is bullish as vaccine hopes induce strong â€˜buy the reopeningâ€™ trade,â€ explains the Bofa strategists led by Michael Hartnett. â€œWe say sell the vaccine in the first quarter 2021.â€ The cash level decline is similar to the economic growth stage that took place after the 2008 sub-mortgage financial crisis, Bofaâ€™s report also highlights.
â€œRecovery expectations have also surpassed prior recessions in both speed and magnitude,â€ the strategists stressed in the December Bofa fund manager survey.
Interestingly, the Bofa report also mentions the most crowded trades and one of them includes bitcoin (BTC). The survey shows that investor sentiment is long tech, short U.S. dollar, and long bitcoin. Roughly 85% of the surveyed fund managers believe that investment profits will accumulate more so during the next year.
According to Danny Scott, CEO and cofounder of Coincorner, an Isle of Man-based crypto exchange and wallet provider, investors these days are looking for a safe haven from the massive government bailouts.
â€œTouching briefly on the unfortunate situation the world has suffered this year, the coronavirus crisis had the knock-on effect of causing a long-awaited financial crash in March,â€ Scott wrote in a note to investors. â€œThis resulted in Government bailouts: the U.S. Federal Reserve printing $3 trillion (plus another $2 trillion on the way), the Bank of England likely printing towards Â£1 trillion and many more around the world following suit. Not to forget the introduction of negative interest rates which look to become the norm,â€ Scott added.
The Coincorner cofounder further wrote:
Bofa strategists and Michael Hartnett detailed in the December survey that ever since fund managers exited cash positions, they jumped on emerging-markets and technology stocks. 42% of the surveyed managers said it was the vaccine optimism that will spur economic recovery in Q2 2021. 76% of the money managers think the recovery will be far greater, according to the Bofa survey data.
Of course, bitcoiners and crypto proponents appreciated the fact that among the most crowded trades in 2020 was the call to â€œlong bitcoin.â€
â€œBofa fund manager surveyâ€™s top trades: #1 long Nasdaq; #2 short US [dollar] and close #3 long bitcoin,â€ tweeted one individual. â€œSo professional investors are long bitcoin yet [the U.S. Securities and Exchange Commission] SEC canâ€™t approve an [exchange-traded fund] ETF, which forces retail to pay [net-asset-value] NAV premium for GBTC,â€ the individual Asi De Silva added.
Itâ€™s not the first time bitcoin (BTC) has been named the most crowded investment of the year. The crypto asset also captured that position back in 2017 in Merrill Lynchâ€™s December global fund manager survey.
What do you think about the three most crowded investments being long tech, short USD, and long bitcoin in the latest Bofa fund manager survey? Let us know what you think about this subject in the comments section below.
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