The latest survey of large global fund managers shows sentiment at its strongest level since mid 2021, with investors running lean on cash and bonds while crowding into equities and raw materials. These managers, who together oversee around US$440 billion, have steadily shifted out of defensive positions as global growth expectations improve and equity markets push toward new highs. The survey, run monthly by a major global bank, has become a closely watched snapshot of how professional investors are thinking about risk, inflation and earnings.
Across portfolios, investors now hold their biggest equity overweight relative to benchmarks since late 2024 and their lowest bond weighting since 2022, while cash balances sit near record lows at about 3.4%. Allocations to commodities are at their most aggressive in two years, reflecting confidence in both economic momentum and potential inflation hedges. Yet beneath this bullish stance there is growing unease about how much money companies are pouring into AI and other large scale technology projects, with more than a third of respondents saying corporate investment has gone too far.
That concern is most visible around capital expenditure tied to artificial intelligence and cloud infrastructure. The survey points to record corporate spending plans over coming years, with the largest US technology platforms expected to collectively channel hundreds of billions of US dollars into data centres and AI infrastructure by 2026. At the same time, roughly a quarter of managers now rank an AI driven bubble among the biggest threats to markets and many see heavy AI infrastructure spending as a likely spark for future credit problems, particularly when combined with private equity and private credit leverage.
This tension is reshaping how portfolios are built. For the first time in months, managers as a group expect smaller companies to beat large caps and favour cheaper “value” stocks over high growth names while only modestly overweighting technology after a sharp pullback from earlier enthusiasm. They are adding to sectors such as energy, materials and consumer staples, trimming exposure to US shares and the US dollar and leaning more into Europe and emerging markets. Many also see more room for gold to run, with expectations for prices well above current levels. This suggests that while the mood looks upbeat on the surface, investors seem to be quietly hedging against the possibility that today’s AI boom and ultra bullish positioning may not deliver the smooth, uninterrupted rally they are hoping for.
