According to a survey of BofA fund managers in June, investors are actively preparing for sustained growth, temporary inflation and a steady tapering of Fed stimulus, arguing that inflation and underweight fears lead to tail risks.
Investment strategists such as Michael Hartnett write that banks have the highest proportion of heavy positions at 30%, while heavy-position weekly stocks are still materials stocks at 23%, as well as industrial stocks, UK stocks and euro zone stocks.
63 per cent of fund managers surveyed expected the Fed to signal a contraction in August / September, while 72 per cent thought inflation was temporary and 68 per cent did not expect a recession until 2024 at the earliest.
A total of 224 respondents took part in the survey, which was conducted from June 4 to 10.