· The threat of a trade war (30%) returns to the top of list of tail risks most commonly cited by investors for the first time since January 2017, followed by inflation (23%) and a slowdown in global growth (16%)
· 74% of investors surveyed now believe the global economy is in the late cycle, the highest percentage in survey history
· Expectations for faster global growth fell 19ppt to net 18% in March, the lowest level since the UK voted to leave the EU in June 2016
· “Long FAANG+BAT” remains the most crowded trade (38%), “Short USD” is now the second most crowded trade (17%), while “Short Volatility” slips to sixth from first in January
· 58% of investors surveyed believe global EPS will grow more than 10% in the next 12 months
· The net percentage of investors who would like to see companies improve their balance sheets is at the highest level in over 8 years
· Fund managers are stubbornly long global stocks, banks, and tech, while remaining short bonds and defensives
· Investors are reducing risk by increasing allocations to defensives such as staples, REITS, the U.S. and banks; they are rotating out of cyclicals and value plays including energy, discretionary, materials and the UK
· Allocation to banks climbed to the second highest level on record, with net 36% of investors surveyed indicating they are overweight the sector
· Pessimism toward UK equities hits an all-time high as net 42% of investors surveyed say they are underweight the region
· On Japan, global investors are still overweight Japan equities (net 26%) and, for the first time since 2009, the majority of fund managers do not expect the Japanese yen to depreciate over the next 12 months