Bank of America Fund Manager Survey Highlights Market Risks Amid Bullish Positioning and Fed Rate Cut Uncertainty

The November 2025 Bank of America fund manager survey [1][2] reveals investors are the most overweight stocks since February 2025, with portfolio cash levels at 3.7%—a threshold generating a technical sell signal [2]. This positioning is identified as a headwind for risk assets [1]. Market data [0] shows prior to the survey release (2025-11-17), major indices declined: S&P500 (-0.61%), NASDAQ (-0.35%), Dow Jones (-1.02%). On release day (2025-11-18), defensive sectors like Utilities (+0.84%) outperformed while risk-sensitive Financial Services (-2.41%) underperformed [0]. The survey covers 172 fund managers managing $475 billion in assets [2].

Cross-domain correlations include the link between Fed rate cut expectations and market stability—without a December cut, the survey warns of further corrections [2]. The most crowded trade (Long Magnificent7, 54% respondents [2]) and biggest tail risk (AI bubble,45% [2]) highlight concentration risk in tech stocks. Defensive sector outperformance (Utilities +0.84% [0]) indicates a shift toward safety amid uncertainty.

Major risks include technical sell signals from low cash levels [2], potential AI bubble burst [2], and financial sector vulnerability without Fed rate cuts [2]. Opportunities exist in defensive sectors like Utilities, which showed resilience amid market volatility [0]. Investors should monitor Fed December meeting outcomes as a critical catalyst for market direction [2].

The survey, conducted Nov 7-13 2025 [2], reflects bullish positioning but fragile market conditions. Key metrics: 3.7% cash levels (sell signal), 54% crowded trade in Magnificent7, and 45% tail risk from AI bubble [2]. Market data shows pre-survey index declines and post-survey defensive sector outperformance [0]. No prescriptive recommendations are provided—this summary supports decision-making with objective analysis.