The latest Bank of America Global Fund Manager Survey shows investor sentiment has dropped to its most bearish level in 11 months, reversing the “frothy bull” mood seen earlier this year. BofA’s composite sentiment gauge, built from cash levels, equity allocations and global growth expectations, fell from 5.6 in March to 3.7 in April.

Growth expectations plunge, inflation fears jump

Expectations for global growth just logged their biggest one‑month drop since March 2022, as managers turn more cautious on the macro outlook. At the same time, inflation expectations are at their highest since May 2021, highlighting concerns that price pressures may stay sticky and delay rate cuts.

Survey details and timing

The poll was conducted April 2–9 and captured responses from 193 investors overseeing about $563 billion in assets. Most answers came in before recent ceasefire headlines and the subsequent rebound in risk assets, meaning some of the pessimism may already be getting priced out.

Contrarian read: negative, but not capitulation

BofA strategist Michael Hartnett argues that such deep pessimism has often marked important upside turning points for equities, with prior sentiment troughs lining up with major lows. He notes, however, that this is not yet the kind of full “capitulation” usually seen at durable bear‑market bottoms, since cash remains around 4.3% and investors are still overweight stocks.

Recession views and what’s needed for a true bottom

Roughly 70% of surveyed managers do not expect a recession, suggesting positioning is cautious but not panicked. Hartnett says a more dramatic washout in growth expectations and positioning might be needed for a classic contrarian “all clear,” with geopolitical de‑escalation, lower oil, rate cuts and better‑than‑expected earnings all important for a sustained bull case.

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