Global Fund Managers Withdrawing Money from Stocks... At 2008 Financial Crisis Levels

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Global major investors have reduced their allocation to risky assets such as stocks to the lowest level since the 2008 Lehman Brothers bankruptcy. Investors' expectations for global economic growth and corporate profits have plummeted to historically low levels.

Bloomberg News reported this on the 19th (local time), citing Bank of America's (BoA) monthly survey of global investors. The fund managers participating in this survey manage assets totaling $722 billion (approximately 945 trillion KRW).

The survey results showed that the allocation to stocks was at its lowest level since October 2008. While expectations for global economic growth and corporate profits fell to record lows, recession forecasts were the highest since May 2020, the early stage of the pandemic. Due to increased uncertainty, the cash portion in their asset portfolios surpassed 6%, marking the highest level since 2001.

The report stated, "Investors have reduced exposure to risky assets to levels not seen even during the global financial crisis," calling it a "signal of full capitulation" amid dire economic outlooks.

Fund managers cited high inflation as the biggest current risk factor, followed by a global recession and hawkish moves by central banks. Fifty-eight percent of fund managers said they were only taking below-average risk, which is higher than during the global financial crisis.

BoA forecasted that fundamentals would remain weak in the second half of this year but that a rally could occur in the stock market in the coming weeks. Earlier, Goldman Sachs and Morgan Stanley predicted that even if a stock market rally occurs, it could be short-lived due to rising inflationary pressures and increasing recession risks.

This content was produced with the assistance of AI translation services.