According to Bank of America’s latest monthly survey of fund managers, global investors have sharply reduced their exposure to US equities over the past two months.
The survey shows that investors are now a net 36% underweight US stocks — the largest underweight in nearly two years. This represents a 53 percentage point decline since February, the biggest drop in the history of BofA’s records.
The poll of 164 fund managers, who collectively oversee $386 billion, identified the risk of a trade-war-driven global recession as the primary market concern. That anxiety follows a series of aggressive tariff announcements by President Donald Trump, which have prompted broad selling across US assets, including equities, the dollar and Treasury bonds. Despite a rebound on Monday, the S&P 500 remains roughly 8% lower year-to-date.
Fund managers cited escalating trade tensions as a key catalyst for reducing US equity allocations. The rapid shift in positioning reflects mounting worries that tariffs could weaken global growth, squeeze corporate profits and unsettle markets worldwide. In this environment, many investors have sought to reduce risk by trimming exposures to the United States, where trade policy uncertainty has been particularly acute.
Beyond trade risks, managers also flagged geopolitical uncertainty and slowing global economic data as factors reinforcing a cautious stance. With the combination of policy-driven market disruption and softer macro indicators, asset allocators have prioritized capital preservation over chasing returns, moving into safer or more diversified holdings.
The large-scale reallocation away from US equities marks a notable change from earlier in the year, when many portfolios maintained stronger US weightings amid record highs and resilient corporate earnings. The suddenness of the decline underlines how quickly sentiment can shift when policy and economic risks rise together.
While the net underweight figure is significant, it does not necessarily predict immediate price movements. Instead, it reflects managers’ collective positioning and risk appetite, which can influence flows and volatility if sustained. Market participants will be watching upcoming economic releases, corporate earnings and any further trade-policy developments for clues about whether this conservative stance will persist or reverse.
In summary, the Bank of America survey highlights a pronounced retreat from US equities among fund managers, driven largely by fears that an intensifying trade war could tip the global economy into recession. That reassessment has translated into the largest recorded shift in US stock exposure in the survey’s history, underscoring the degree to which policy uncertainty is reshaping investor behavior.