Fund managers grew markedly more cautious in April, according to Bank of America's monthly Global Fund Manager Survey (FMS), with the aggregate sentiment gauge slipping to its lowest reading since June 2025. The poll, which canvassed 193 managers overseeing $563 billion in assets between April 2 and April 9, recorded material moves in both economic expectations and portfolio positioning.
BofA's broadest sentiment measure fell to 3.7 in April from 5.6 in March. The survey showed one of the sharpest single-month declines in expectations for global growth in recent years: a net negative 36% of managers now expect global growth to worsen over the coming 12 months, down from a net positive 7% in March. BofA noted this represented the steepest monthly deterioration since March 2022.
At the same time, inflation forecasts jumped to levels not seen since May 2021. A net 69% of respondents projected higher global consumer prices over the next year, up from 45% the prior month. That swing in inflation outlook contributed to a large increase in the share of managers anticipating stagflation: 76% now expect stagflation versus 51% in March.
Despite the darker growth and inflation outlooks, an outright recession was not the majority view. About 70% of surveyed managers judged a recession unlikely. A slight majority, 52%, still expected a soft landing for the global economy, while 9% predicted a hard landing.
Portfolio shifts in April reflected the mood change. Cash balances held at 4.3%, the highest level since May 2025, although this remains below the 5% cash threshold BofA uses as a contrarian buy signal. The bank's Bull & Bear Indicator edged down modestly to 6.1 from 6.3, leaving it in neutral territory.
On allocation specifics, managers reduced exposure to equities overall and rotated out of Japan and healthcare, while moving into cash, the U.S. dollar and telecoms. Net global equity allocation fell to a 13% overweight from a 37% overweight in March, marking the lowest net equity positioning since July 2025. Emerging market equities remained the most favored regional overweight, while Japan experienced the largest underweight move since November 2024.
Geopolitical conflict emerged as the top tail risk for the second month running, cited by 44% of respondents compared with 14% in February. The most crowded trades named by managers were long oil and long global semiconductors, each indicated by 24% of participants, replacing long gold which had been most cited in March.
On commodity expectations, managers forecast oil at $84 a barrel by year-end. BofA highlighted that this would be a 38% increase from $61 per barrel Brent at the start of 2026.
Monetary policy expectations remained mixed. A majority of 58% still expected the Federal Reserve to cut rates within the next 12 months. By contrast, 46% anticipated the European Central Bank would hike rates over the same horizon, while only 12% expected the ECB to cut.
Bottom line: The April FMS depicts a marked shift toward pessimism among global fund managers, driven by downgrades to growth outlooks and elevated inflation expectations. That combination has prompted reductions in equity exposure and modest increases in cash and defensive positions such as telecoms and the U.S. dollar.