The market’s biggest investors are ‘paranoid’ that being long US tech stocks is now the ‘most crowded trade of all time,’ BofA says

• In accordance with a fund supervisor survey conduced  by Financial institution of America, traders are “paranoid” that lengthy US tech shares is the “most crowded commerce of all time,” citing 80% of survey respondents.
• Amid excessive tech focus in standard inventory market indexes just like the Nasdaq 100 and the S&P 500, the second hottest response to tail-risks for the market is “tech bubble.”
• Nonetheless, a majority of traders say “It is a bull market,” the survey stated.
• Listed below are extra insights from the Financial institution of America September fund supervisor survey.
• Visit Business Insider’s homepage for more stories.

---

Financial institution of America’s September fund supervisor survey of 199 contributors who handle $601 billion in property is in, and one sticking level appears to be know-how shares.

In accordance with the survey, traders are “paranoid tech,” with 80% of respondents saying it’s “essentially the most crowded commerce” ever available in the market.

And amid excessive tech focus in standard inventory market indexes just like the Nasdaq 100 and the S&P 500, 22% of traders stated they concern that the most important “tail danger” for the market is a tech bubble, solely behind 30% of respondents saying a second wave of COVID-19 is the most important danger.

Simply 10 shares within the S&P 500 accounted for greater than 50% of August’s 7.2% return, BofA highlighted in a notice final week. The highest 5 shares chargeable for these returns had been Apple, Microsoft, Amazon, Facebook, and Salesforce.

Regardless of the heightened fear about tech and its sheer measurement as a share of the general market, a majority of traders say we are actually in a brand new bull market. Fifty-eight p.c stated “It is a bull market,” a stable improve from final month’s studying of 46% for a similar query.

Learn Extra: Morgan Stanley pinpoints the most attractive opportunity it sees for investors as a new bull run takes shape – and shares 3 strategies for generating market-beating returns

In the meantime, 29% of survey respondents stated they consider the market is experiencing a “bear market rally,” marking a gradual decline from final month’s studying of 35%. 

Technically, the inventory market is in a brand new bull market provided that the S&P 500, Nasdaq 100, and Dow Jones industrial common all made recent report highs after falling greater than 20%.

Alongside the identical strains of whether or not it is a bull market or a bear market rally, extra survey respondents now consider the financial system is experiencing a U-shaped restoration relative to final month’s survey, in response to Financial institution of America.

On the macro aspect, 84% of respondents anticipate increased world progress, and 40% anticipate the worldwide financial system to get “quite a bit stronger,” which is the upper studying ever, in response to Financial institution of America.

Regardless of the bullish sentiment amongst survey respondents, money ranges rose in August from 4.6% to 4.8%, slightly below BofA’s “concern” studying of money ranges surpassing the 5% threshold.