Investor appetite for global equities has climbed to its strongest point in roughly five years, according to the latest fund manager survey from Bank of America. The majority of participants anticipate continued economic expansion, signaling a robust risk-on sentiment across markets.

The survey, conducted between August 7 and August 13, gathered insights from 180 respondents who collectively oversee $525 billion in assets under management. A net 56% of participants reported being overweight global stocks, marking the highest reading since November 2021.

Strategist Michael Hartnett noted in the research report that a record 56% of respondents now predict a "no landing" economic scenario, where growth persists without recession. Meanwhile, 72% of those surveyed believe the Federal Reserve will hold interest rates steady before the US midterm elections.

In terms of market positioning, the most crowded trades include long positions on global semiconductors, cited by 53% of respondents—a notable decline from July's all-time high of 82%—followed by shorting the Japanese yen at 12%, and long positions on the "Magnificent Seven" US tech giants at 11%.

When asked about primary tail risks, 32% of investors flagged an artificial intelligence bubble as the top concern, followed by disorderly rises in bond yields at 27%, a second wave of inflation at 25%, and geopolitical conflicts at 6%. Approximately 38% of respondents believe that capital expenditures by AI hyperscalers are the most likely trigger for a systemic credit event.

Despite these concerns, a robust 71% of participants do not foresee a reduction in AI capital spending through 2026, while 58% expect that AI will not meaningfully impact the labor market until at least 2028.