LONDON (Reuters) - Cash levels in investment portfolios have plunged to the lowest since just before the so-called taper tantrum of 2013, according to BofA's February fund manager survey, which also showed investors overwhelmingly bullish on the economic outlook.
World stocks have been notching successive record highs in 2021, as central banks remain supportive and governments inject money into the system to bring economies up to speed from the Covid-19 damage.
Net 91% of investors expect a stronger economy, the best economic outlook ever, BofA's survey of 225 fund managers with $645 billion in assets under management showed on Tuesday.
"The only reason to be bearish is... there is no reason to be bearish," Michael Hartnett, BofA's chief investment strategist told clients.
BofA said cash levels at fund managers dropped to 3.8%, the lowest since March 2013, just before the U.S. Federal Reserve sparked a market tantrum by signalling intent of winding down, or tapering, the bond-buying programme launched during the 2008 crisis.
A taper tantrum was seen as the second biggest "tail risk" by investors surveyed by BofA between Feb. 5 and Feb. 11. Vaccine roll out timings remained the top worry.
Despite all of these issues simmering in the background and the huge run-up across markets, BofA's survey found only 13% of its participants concerned about asset bubbles.
About 53% investors said U.S. equity markets were in a late- stage bull market while 27% saw it in the early stages.
Meanwhile, long tech was the "most crowded trade", followed by long bitcoin and short U.S. dollar.