BlockBeats News, August 19th. The August Global Fund Manager Survey released by Bank of America on Tuesday showed that among the 180 surveyed asset management firm representatives (with total AUM exceeding $5 trillion), optimism has surged to the third-highest level since 2022. This represents the most bullish sentiment in the financial markets in nearly four years.

This extreme euphoria is clearly reflected in institutional asset allocations. The survey indicates that the current cash allocation of fund managers has dropped to 3.5%, hitting the lowest range since the inception of the survey in 1998. Michael Hartnett, Chief Equity Strategist at BofA, pointed out that based on BofA's "Cash Rule," when the cash level falls to or below 4%, it usually triggers a "sell" signal. This means that the current market allocation is overcrowded, and in the absence of continued inflows of new money, any negative shocks on the growth, inflation, or policy fronts could lead to severe market turbulence.

To address the current extremely bullish environment, BofA also proposed some contrarian investment ideas in the survey. Against the backdrop of global institutional underweighting of bonds and gold, going long on bonds, buying undervalued gold or UK equities may provide better defensive returns when market sentiment reverses.