Investors slash US equity holdings by most ever, BofA survey shows

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Investors made the “largest ever” lower to their US equity allocations in March, as President Donald Trump’s erratic commerce struggle sparked fears over the US financial system and prompted a heavy Wall Road sell-off.

Allocations to US equities plunged 40 proportion factors, from 17 per cent obese in February to internet underweight 23 per cent in March, in line with Financial institution of America’s intently watched survey of fund managers. Over the identical interval, allocations to Eurozone shares leapt to the best stage since July 2021.

In keeping with BofA analysts, stagflation fears, the worldwide commerce struggle and an finish of US exceptionalism have pushed a “bull crash” in sentiment.

“It’s not stunning to see fund managers shifting away from the US market,” stated Trevor Greetham, head of multi-asset at Royal London Asset Administration. “It’s priced for perfection and the coverage popping out of the White Home ain’t that.”

In keeping with the survey, practically 70 per cent of buyers now say the “US exceptionalism” theme, which pushed the S&P and Nasdaq indices to report highs within the weeks after Trump’s election win in November, has peaked.

This abrupt shift comes as US shares have tumbled since hitting a report excessive in February. The survey additionally confirmed that buyers’ international development expectations collapsed in March by the second largest margin on report.

In addition to US shares broadly, buyers have been damaging about tech and power shares, whereas they have been extra upbeat in direction of utilities and banking shares.