See the source image

According to the latest BoA Merrill Lynch survey, the last time fund managers were this nervous was just after the collapse of Lehman Brothers in 2009.

As Quilter Investors, head of dealing, Maz Alamouti observes, “This is far more than just ‘sell in May and go away’. We saw a huge shift last month; average cash levels jumped 20% [to 5.6%] and allocations to global equities fell [32%] to their lowest since March 2009. Meanwhile, equity investors have piled into classic, quality defensives.

“At the same time,” he says, “bond allocations jumped 12% and US Treasuries became the most ‘crowded trade’. Trade war concerns, potential recession and monetary policy impotence have made fund managers batten down the hatches.”