Recession fears highest in 8 years: BofAML survey

Every one out of three global fund manager sees a likely recession in the next 12 months, as per the latest survey by Bank of America Merrill Lynch (BofAML).

Among global fund managers that BofA-ML surveyed, 34 per cent think a recession is likely in the next 12 months, the highest possibility of recession since October 2011.

The survey was done between August 2 and August 8 and an overall 224 panelists with $553 billion in assets under management participated in the survey.


Half of the managers in the survey feel that corporates are excessively leveraged and should take steps to improve their balance sheets.

“Majority of investors want corporates to use cash to improve balance sheets rather than capex or buybacks,” the survey said.

The findings also highlighted that trade war continued to remains the biggest tail risk for global economies.

Concerns over trade war rose by 15 percentage point with 51 per cent of investors saying it is the top “tail risk”, and topped the charts for 16 of the past 18 surveys.

The dominant concerns of investors since 2011 have been eurozone debt, Chinese growth, populism, quantitative tightening and trade wars.

The survey added that net 15 per cent investors would like to be overweight on the US over the next 12 months, despite 78 per cent saying the region is looking overvalued at present.