Original title: bank of America July Fund Manager Survey: significantly increased holdings of commodities and stocks, inflation is still the biggest risk

Bank of AmericaA survey of fund managers in July shows thatOnly 22% of investors think that inflation will rise in the next 12 months, and 70% think that the rise in inflation is only temporary.That is to say, most people believe that the Fed believes that inflation is temporary.

But,Inflation is still seen as the biggest tail riskAccounting for 29% of the respondents. This was followed by "tapering panic" (26 per cent), "asset bubble" (15 per cent), "China's economic slowdown" (13 per cent) and "novel coronavirus" (13 per cent).

70% of fund managers expect the fed to signal a reduction in the pace of asset purchases in august or September. The key dates worth watching are the Jackson Hole central bank annual meeting in August and the Fed's September monetary policy meeting.

A growing number of fund managers also expect the Fed to raise interest rates later than previously expected. The survey shows thatMost people think that an interest rate hike is most likely in the second half of 2022, but more and more respondents say they think the Fed will postpone it until 2023.。

Nearly 40% of investors think the Fed will raise interest rates in January 2023.The June survey is expected to raise interest rates in November 2022. It is worth noting that after the release of US CPI data in June on Tuesday, US federal funds rate futures showed a 90 per cent chance of the Fed raising interest rates in December 2022 and 100 per cent in January 2023.

Nearly 73% of investors said the economy was in the middle and later stages of the cycle., up 9% from the US survey in June. Fund managers are much less optimistic about growth, earnings and inflation than they were earlier this year.

Believe that economic growth andThe number of respondents whose inflation was higher than the current forecast fell by 2%. Overall, 74 per cent of fund managers still expect growth and inflation to be "above trend".

Profit growth is also expected to fall.Only 53% of fund managers expect earnings per share to rise.Compared with 89% in March.

The Bank of America survey also showed that fund managers increased their exposure to the technology industry last month, but they (26%) alsoRate long technology stocks as the most crowded trade so farSecond, long ESG (25%), long Bitcoin (15%), long commodities (14%), and short US Treasuries (9%).

The survey also shows that cyclical stocks such as industries and materials that have boomed in recent months continue to benefit as the world economy recovers further. The survey said:

Commodity asset allocation is at an all-time high, but note that the share of cyclical assets has fallen sharply over the past 15 years. Energy and financial assets now account for only 18 per cent of the benchmark.

In terms of overall asset allocationA net 58% of portfolio managers increased their holdings of global stocks in JulyCompared with 61% in June. A net 68% of fund managers reduced their bond holdings this month, down from 69% in June.

Global investors' allocation of commodities rose to a net 29 per cent in July, the highest on record.By contrast, net holdings increased by 27% in June and May and 23% in April.

In terms of regional stock asset allocationGlobal investors are bullish on US and euro zone stocks。

The allocation of US stocks rose to a net increase of 11 per cent in July, compared with a net increase of 6 per cent in June and May.

This month, net 45 per cent of managers increased their holdings of eurozone stocks, the highest level since January 2018, up from 41 per cent in June and 35 per cent in May.

Fund managers cut their holdings of global emerging market equities to a net increase of 14 per cent, the lowest level since October 2020 and well below the record net increase of 62 per cent recorded in January. By contrast, net holdings increased by 31% in June and 30% in may.

A total of 239 fund managers took part in the survey, with total assets under management of $742 billion.