LONDON (Reuters) – Investor outlooks have deteriorated to their most pessimistic in a decade, Bank of America Merrill Lynch’s December investor survey showed on Tuesday.
A trader looks on while waiting for the initial price of Tencent Music Entertainment company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 12, 2018. REUTERS/Bryan R Smith
A net 53 percent of investors surveyed, who manage $694 billion in assets, said they expect global growth to weaken over the next 12 months, according to the poll, which took place from Dec. 7 to Dec. 13.
The U.S. dollar replaced technology stocks known as FAANGs in the United States – Facebook, Apple, Amazon, Netflix and Google – and China’s BATs – Baidu, Alibaba and Tencent – as the most crowded trade for the first time since January, it found.
Technology stocks, in particular iPhone maker Apple, have led a recent sell-off on Wall Street, which has seen the S&P500 .SPX sink almost 13 percent and the Nasdaq .NDX drop 15 percent this year. The Nasdaq is on track for its worst quarter in a decade.
In a sign of a further darkening in mood, investors piled into bonds, often considered a haven in times of geopolitical and economic uncertainty. This month’s survey found the biggest-ever one-month rotation into debt on records going back to 2001.
Bond allocation rose 23 percentage points to a net 35 percent underweight, marking the highest bond allocation since the Brexit vote in June 2016, it showed.
(For a graphic on ‘The FAANGs (YTD