Core Insights - Holdings of cash at fund managers have increased significantly, marking the largest jump in six years according to Bank of America Corp's latest survey [1][12] - Investors are shifting their positions in response to geopolitical conflicts, with a notable preference for cash over equities, bonds, and gold [8][12] Cash Allocations - Cash levels in portfolios surged to 4.3% in March from 3.4% in February, although this remains lower than the 5.9% recorded after the Ukraine invasion and during the Covid pandemic [9][12] - Despite the increase, cash allocations are still considered low by historical standards, which may hinder both equities and bonds as geopolitical and macroeconomic uncertainties persist [2][12] Market Reactions - Global stocks have declined by 5% in March, while Brent crude oil prices are experiencing their largest monthly increase since 1990, trading above $100 per barrel [4][12] - The expectation of interest rate hikes by central banks has increased, with markets now pricing a 50% chance of a Federal Reserve rate hike by October, contrasting with previous expectations of rate cuts in 2026 [5][12][6] Investor Behavior - Investors are abandoning traditional assets like equities, bonds, and gold, opting instead to increase cash allocations as a defensive strategy against ongoing geopolitical tensions [8][12] - Gold prices have fallen over 15% since the onset of the war, as the prospect of steady or rising interest rates diminishes the appeal of non-yielding assets [9][12]
US Stock Market: Investors switch to cash from stocks and bonds like it's 2022
The Economic Times·2026-03-27 00:18