LONDON (Reuters) – Fund managers loaded-up on UK stocks and cut exposure to technology stocks as rising inflation and “taper tantrum” fears leave growth stocks vulnerable to pullbacks, Bank of America (NYSE:)’s May fund manager survey released on Tuesday found.
Allocation to UK equities in May was the highest since March 2014, BofA’s survey of 215 fund managers with $625 billion in assets under management showed, as Brexit fog cleared and the economy re-opened after a couple of strict Covid-19 lockdowns.
Unprecedented stimulus measures to tackle the COVID-19- induced recession have now sparked worries about inflation, which featured in the BofA survey as the biggest tail risk for markets.
Those worries prompted investors to buy into sectors more attuned to the early economic cycle, such as commodities, banks and mining, while cutting down their overweight positions on technology stocks to a three-year low.
Elsewhere, long bitcoin topped the list of most crowded trades with 75% of the investors surveyed saying the most popular digital currency was in a “bubble”.
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