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Investor allocations to US equities at record high, to cash at record low, BofA says
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LONDON (Reuters) – Investor allocations to U.S. equities has hit a record high this month, at the expense of European stocks, commodities and cash, according to a December survey from BofA Global Research.
LONDON (Reuters) – Investor allocations to U.S. equities has hit a record high this month, at the expense of European stocks, commodities and cash, according to a December survey from BofA Global Research.
This shift, according to a survey of 171 participants with $420 billion of assets under management, is on the back of U.S. growth optimism, bets that Donald Trump’s second term as president will bring in tax cuts and deregulation, and looming rate cuts from the Federal Reserve.
Allocation to cash are at its lowest since at least April 2021, to commodities, at the lowest since June 2017 and investors have the biggest underweight in European stocks since October 2022.
That means investors are the most overweight U.S. equities relative to the euro zone since June 2012, the time of the sovereign debt crisis in the single-currency bloc.
(Reporting by Alun John; Editing by Amanda Cooper)
Equity represents ownership in a company, typically in the form of stocks. Investors buy equity to gain a share in the company's profits and growth.
A survey in finance is a method of collecting data from investors or financial professionals to gauge market sentiment, investment preferences, or economic outlook.
Commodities are basic goods used in commerce that are interchangeable with other goods of the same type, such as oil, gold, or agricultural products.
Cash allocation refers to the portion of an investment portfolio that is held in cash or cash-equivalents, providing liquidity and stability.
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