While 66% of respondents see a soft economic landing, 54% predict international stocks will outperform U.S. equities over the next five years
Michael Nagle/Bloomberg via Getty Images
Investor sentiment is back — well, at least, among global fund managers. According to Bank of America $BAC’s June 2025 Global Fund Manager Survey, optimism has has swelled to pre‑tariff‑shock levels, wiping out the dips stirred by President Donald Trump’s “Liberation Day” tariffs.
The headline numbers pack a punch: 66% of fund managers now anticipate a “soft landing” for the global economy, up from 37% in April. And while 82% of respondents in April predicted weakening growth, only 46% hold that view in June. That’s the largest two-month sentiment swing since last year’s presidential election. Recession fears have diminished drastically — now, 36% of respondents think a downturn is "unlikely."
So what’s behind this mood swing? The survey, which was conducted from June 6 to June 12 and captures responses from 190 fund managers overseeing over $520 billion in assets, says diffusing trade tensions, rolled-back and somewhat stabilizing tariffs (expected by about 75% of investors to be an average of 15% or lower), and better-than-feared U.S. economic data are the big factors.
This resurgence in confidence is reflected in a significant shift in investment strategies. Fund managers are lowering cash allocations to a three‑month low while boosting positions in emerging‑market equities, energy, banks — and leaning especially into Eurozone stocks, supported by a recent Germany fiscal stimulus.
But there’s a twist.
While the world warms up, sentiment toward U.S. assets is increasingly bearish. The U.S. dollar is now the most underweighted currency in at least 20 years, making it one of the hottest “crowded trades,” alongside gold and tech. The dollar index has tumbled nearly 9.6 % this year, and more than half (54%) of fund managers predict international stocks will outperform U.S. equities over the next five years.
Concerns over the sustainability of U.S. fiscal policy are also prevalent, with 81% expecting recent spending bills to significantly add to national debt. Treasury yields are predicted to climb, possibly reaching 5%.
So while confidence largely rebounds abroad, it’s cooling off at home. The latest survey paints a clear picture: Global capital is rotating out of U.S. assets and chasing upside in Europe and emerging markets. Risk appetite is back — but it’s looking outward. Fund managers are shedding cash, leaning into higher-beta plays overseas. The bull case is building, but so are the tail risks — shaky fiscal paths, geopolitical sparks, and a market still on edge.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
