Big investors have cut their allocations to equities to the lowest level since the collapse of Lehman Brothers at the height of the global financial crisis as rising recession fears spark worries about corporate profits.
Fund managers this month reduced their net overweight position in stocks to the lowest level since October 2008, while also boosting cash holdings to a 21-year high of 6.1 per cent of assets under management, a survey by Bank of America of 259 investment managers with combined assets of $722bn published on Tuesday showed.
The study highlights how even after global markets posted their worst first half of a year in five decades — with the FTSE All-World barometer shedding 21 per cent — many asset managers remain deeply uneasy.