Global investors have reduced their exposure to U.S. stocks by a record margin over the past two months, according to a Bank of America Global Research report released Tuesday — a trend that appears set to continue.
BofA’s closely watched monthly survey of fund managers, cited by Reuters, revealed that respondents are now a net 36% underweight on U.S. equities — the most bearish positioning in nearly two years. This represents a dramatic 53 percentage-point drop since February, the sharpest decline ever recorded in the survey’s history.
The shift reflects mounting investor anxiety over escalating trade tensions and their potential to trigger a global recession. A majority of survey participants identified the U.S.-China trade war as the top risk to markets.
President Donald Trump’s aggressive tariff agenda has rattled financial markets, sparking a selloff in U.S. stocks, the dollar, and Treasury bonds. While the S&P 500 posted gains on Monday, the index remains down roughly 8% year-to-date.
The survey, which polled 164 global fund managers overseeing a combined $386 billion in assets, also highlighted growing fears of a downturn. A net 42% of investors now anticipate a global recession — the highest reading since June 2023, and the fourth-highest in the past two decades.
Confidence in the so-called “U.S. exceptionalism” narrative — which has driven recent market outperformance — is also waning. Some 73% of respondents believe that theme has peaked. In a striking shift, 49% now view “long gold” as the most crowded trade in markets, overtaking U.S. tech stocks for the first time in two years.
Currency markets are reflecting the mood as well. A net 61% of investors expect the U.S. dollar to depreciate over the next year, the highest level since May 2006. The greenback has slid significantly in recent weeks, while safe-haven currencies like the euro, yen, and Swiss franc have seen strong gains.