BofA survey shows fading equity exuberance as bond-yield risk tops investor worries

September 15, 2026 at 02:02 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

A Bank of America survey shows a net 49% of fund managers are overweight global equities, down from 56% last month. Respondents now rank a disorderly rise in bond yields as the biggest tail risk to markets. Cash holdings rose to 3.9% of portfolios, still at levels flashing a sell signal for risk assets.

Key Facts

A net 49% of fund managers are overweight global equities, down from 56% last month, according to the Bank of America survey.
Cash holdings rose to 3.9% of portfolios, a level that still flashes a sell signal for risk assets.
A net 48% of fund managers are underweight bonds, the most since May 2022.
About 44% of investors expect a split US Congress after the midterm elections, with a Democratic House and Republican Senate.
The survey was conducted from Sept. 4 to Sept. 10 and canvassed 170 participants with $470 billion in assets.

Investor Positioning

The Bank of America survey shows a net 49% of fund managers are overweight global equities, down from 56% last month. Cash holdings rose to 3.9% of portfolios, still at levels that flash a sell signal for risk assets, strategist Michael Hartnett wrote. A net 48% of fund managers are underweight bonds, the most since May 2022. The share of respondents expecting a double-digit increase in corporate earnings over the next year was the highest since August 2021.

Bond Market Risks

Respondents flagged a disorderly rise in bond yields as the biggest tail risk to the market. The 10-year US Treasury yield rose to the highest since 2007 on Tuesday, with oil prices firmly above $100 a barrel. Swaps traders are pricing in about 94% odds of a Federal Reserve rate hike on Wednesday, the first increase in three years. A net 25% of participants said monetary policy is too stimulative, the highest since 2022. Nearly half the participants said they expect no impact on yields from the Treasury's buyback program.

Election Scenarios

About 44% of investors said the most likely midterm outcome was a split between a Democratic House of Representatives and a Republican Senate. In the event of a Democratic sweep, nearly half of respondents expect bond yields to rise and stocks to decline.