Warning: Professional investors just turned the most bearish on shares in 30 years

A record number of fund managers plan to dump US stocks over the next year, as sentiment around equity returns hits its worst in 30 years, according to the latest Bank of America Fund Manager Survey.  

The investment chaos on President Trump's tariff rollercoaster resumed on Wednesday, after the US indefinitely banned Nvidia (NASDAQ: NVDA) from exporting H20 chips to China, and equity futures gapped lower to extend the market's horror start to 2025. The S&P/ASX 200 traded flat and is down 4.7% for 2025. 

Bank of America's survey, conducted April 4th to 10th, includes 164 fund managers running US$386 billion ($508 billion) in funds under management, and also revealed that investor sentiment is now at its fifth-lowest on record after 2001, 2009, 2019 and 2022, when based on current cash holdings, equity allocation, and global growth expectations. 

US dollar expected to fall

The survey that could be taken as a proxy for forward-looking selling pressure, also showed that 61% of respondents expect the hitherto bulletproof US dollar to fall over the next 12 months in its highest reading since 2006. 

The broad expectations for a weaker US dollar are likely to fuel selling of US stocks and bonds, as powerful investors look to rotate cash proceeds into cheaper markets with potential currency tailwinds such as Europe and Asia. 

US treasuries have also been sold-off since Liberation Day, as bond yields climb and investors look to hold assets in currencies other than the greenback linked to President Trump's erratic behaviour. 

The gloominess among professional investors also extends to the broader economy with 82% of respondents reportedly expecting the global economy to weaken, as trade barriers hurt confidence, growth, and economic activity. 

Retail investors still buying, gold popular, ASX hits record volumes

Locally, the latest data from Australian exchange traded fund (ETF) giant BetaShares shows retail investors are less concerned about a potential global recession as net ETF inflows in Australia reached $3.6 billion in March for the third best month on record. 

However, total assets under management across the Australian ETF industry dropped 1.94% month-on-month to $250.4 billion, largely as a result of the broad sectoral sell-off. 

Total trade volumes on the Australian Stock Exchange (ASX: ASX) also hit a record $19 billion in March as retail and institutional investors scrambled to react to US tariffs and their potential to trigger a giant rotation out of US assets. 

Bank of America's survey also showed nearly three-out-of-four respondents said "US exceptionalism" has peaked, in another hint the markets could be at a historic turning point. 

One option for investors spooked by the prospect of capital losses on equity holdings is gold. The metal once broadly viewed as a barbarous relic has now jumped 36% over the past year and added 1.3% to a record US$3269 an ounce on Wednesday morning.

Its renaissance as a safe haven asset appears to be gaining popularity among global investors with a separate Bank of America showing gold funds had attracted a record US$80 billion in inflows to start 2025. 

Gold is also a beneficiary of a weaker US dollar that's expected by the majority of the survey's fund manager respondents to fall.