Group 1 - The core sentiment in the gold market remains bullish, but there are increasing downward risks as market sentiment is extremely optimistic, raising concerns among fund managers [1] - According to a recent Bank of America fund manager survey, 41% of respondents indicated that "long gold" is currently the most crowded trade for the third consecutive month, although this sentiment has declined from its peak in May [1] - 20% of fund managers view "shorting the dollar" as the third most crowded position in the global market [2] Group 2 - The survey indicates that the main contrarian trades currently are long dollar and short gold, with 13% of fund managers believing gold will be one of the best-performing assets over the next five years, while 54% believe international stocks will outperform during this period [3] - Investor sentiment has improved, with only 36% of participants expecting a recession in the U.S., down from 44% in April, and 66% anticipating a soft landing for the economy [3] - Despite recent speculative risks, the survey highlights some potential long-term positive trends for gold, with 59% of respondents expecting the U.S. government funding bill to fail, while 81% anticipate an increase in the government budget deficit [3] Group 3 - Analysts note that despite a significant weakening of the dollar index, many commodity analysts believe gold is not at risk from a potential bullish resurgence of the dollar, as the negative correlation between gold and the dollar has diminished [4] - Bank of America commodity analysts reiterated that gold could potentially reach $4,000 per ounce this year due to ongoing concerns about the growing government deficit [4] - Analysts suggest that while gold has been viewed as a crowded trade in recent months, historically, it has not consistently attracted investor attention, and there is still growth potential as gold-backed ETF holdings remain significantly below the historical highs set in 2020 [4]

Core Viewpoint - A significant shift in investment sentiment is observed, with 54% of fund managers believing that international stocks (excluding the US) will outperform US stocks over the next five years, indicating a decline in the dominance of the US stock market [1][2]. Group 1: International Stocks vs. US Stocks - The term "international stocks" refers to stock markets outside the US, including both developed and emerging markets such as Europe, Japan, Canada, Australia, and various emerging markets like China, India, and Brazil [2]. - This is the first time Bank of America has asked institutional investors to predict the best-performing asset class over a five-year horizon, reflecting a growing trend of "Sell America" since April [2][3]. - If fund managers' predictions hold true, it would reverse the trend of heavily investing in US stocks, which have outperformed international stocks in 13 out of the last 15 years [2][3]. Group 2: Market Performance and Trends - The S&P 500 index has recorded its largest underperformance against the MSCI World Index (excluding the US) since 2009, with European stocks showing a rare trend of outperforming US stocks by 20% after adjusting for currency fluctuations [3]. - Amundi SA's report indicates that ongoing uncertainty in US government policy and a growing budget deficit will create a challenging environment for the economy and markets, prompting a shift in focus towards European and emerging markets [3][4]. - Jeffrey Gundlach, CEO of DoubleLine Capital, suggests that the "American exceptionalism" narrative is collapsing, predicting a long-term depreciation of the US dollar and continued outperformance of international stocks [4]. Group 3: Fund Manager Sentiment - In the latest Bank of America survey, 59% of institutional investors do not expect a boost in US economic activity from the government's spending plans [5]. - 21% of respondents anticipate an increase in US Treasury yields over the next year, the highest proportion since August 2022 [5]. - There is a notable shift in asset allocation preferences, with a net 31% of investors planning to reduce their holdings in the US dollar and a net 36% planning to reduce their exposure to US stocks [5].

Core Insights - The Bank of America survey indicates that global stock markets, excluding the U.S., are expected to outperform the U.S. stock market over the next five years, suggesting a shift in investor sentiment away from U.S. dominance in equity markets [1][5] - 54% of fund managers believe that international stocks will be the best-performing asset class, while only 23% favor U.S. stocks [1][5] - The survey reflects a growing trend of "Sell America" trades among institutional investors, particularly in light of U.S. government policies and budget deficits [2][5] Summary by Category International Stocks - International stocks are defined as stocks outside the U.S., including developed markets (e.g., Europe, Japan) and emerging markets (e.g., China, India) [1] - The performance of international stocks is compared to U.S. stocks, with a notable shift in expectations for future returns [1][5] U.S. Market Sentiment - The survey marks the first time Bank of America has asked institutional investors to predict the best-performing asset class over a five-year horizon [2] - Historical data shows that the U.S. stock market has outperformed international stocks in 13 out of the last 15 years, but this trend is changing [5] Economic Outlook - 59% of institutional investors do not expect a boost in U.S. economic activity from the government's spending plans [8] - There is a significant negative sentiment towards the U.S. dollar and U.S. stocks, with net 31% and net 36% of investors planning to reduce their holdings, respectively [8]

Group 1 - Investors' net underweight position in the US dollar is at 31%, the highest in 20 years, marking it as the "most extreme view" in Bank of America's June global fund manager survey [1] - 47% of investors believe that a trade war triggering an economic recession remains the biggest tail risk, down from 80% in April [1] - There is an improvement in global economic outlook, with a net 46% of respondents expecting economic weakness, compared to a record net 82% in April [1] Group 2 - A net 54% of investors consider international stocks to be the best-performing asset class over the next five years, followed by US stocks (23%), gold (13%), and bonds (5%) [1] - Investors are rotating stock funds from other regions into emerging markets, with an overweight position of 28%, the highest since August 2023 [1] - The overweight position for European markets is at 34%, while the net underweight for the US market stands at 36% [1] Group 3 - In the June fund manager survey, investors increased allocations to energy, banks, telecommunications, and industrials, while reducing allocations to utilities, staples, and healthcare [1]