Investment managers worldwide are expressing mounting concerns about excessive corporate spending, even as market optimism continues to run high and future gains appear more challenging to secure, according to a new Bank of America survey released Tuesday.
The monthly study, which included responses from 162 fund managers controlling $440 billion in assets, revealed that cash holdings increased to 3.4% in February, up from January’s historic low of 3.2%. Meanwhile, these investors maintained significant positions in commodities and stocks while continuing to avoid bonds.
Economic outlook improved even more, with predictions for a worldwide economic “boom” reaching their peak since February 2022, and projections for profit growth exceeding 10% – the most optimistic since 2021. However, an unprecedented number of survey participants indicated that corporations are investing too heavily, with chief investment officers now prioritizing stronger financial foundations over expanded capital spending.
Artificial intelligence market bubbles emerged as the top concern among investors’ greatest potential risks.
