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Exposure To Risk Assets Slashed

Updated: Aug 2, 2022

Investors slashed their exposure to risk assets to levels not seen even during the global financial crisis in a sign of full capitulation amid a “dire” economic outlook, says the Bank of America’s monthly fund manager survey. It shows global growth and profit expectations sank to an all-time low, while recession expectations were at their highest since the pandemic-fueled slowdown in May 2020. Investor allocation to stocks plunged to levels last seen in October 2008 while exposure to cash surged to the highest since 2001. A net 58 per cent of fund managers said they’re taking lower than normal risks, a record that surpassed the survey’s global financial crisis levels. The report found high inflation is now seen as the biggest tail risk, followed by a global recession, hawkish central banks, and systemic credit events.


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