Bank of America’s August global fund manager survey found that 32% of investors view an artificial intelligence bubble as the biggest tail risk facing markets. The survey defined tail risk in practical terms as the possibility of extreme and rare events that could have a major impact on financial markets. Another 27% of respondents said a disorderly rise in bond yields was the second-largest tail risk.
At the same time, confidence in U.S. equities continued to build. The survey showed that 27% of fund managers were overweight U.S. stocks relative to global benchmark allocations, up 3 percentage points from July and the highest level since December 2024. In year-to-date performance, U.S. equities still led most overseas markets, with the S&P 500 up 13% and the STOXX Europe 600 up 10%. Even so, stock markets in Japan and South Korea outperformed U.S. shares over the same period.
According to BlockBeats, Bank of America’s August global fund manager survey showed that 32% of investors see an artificial intelligence bubble as the biggest tail risk for markets.
Tail risk refers to the possibility of extreme and rare events that could have a major impact on financial markets. The survey also found that 27% of respondents viewed a disorderly rise in bond yields as the second-largest tail risk event.
At the same time, investor confidence that U.S. stocks will outperform other regional markets continued to strengthen. The survey showed that 27% of fund managers were overweight U.S. equities relative to global benchmark weights, up 3 percentage points from July and the highest reading since December 2024.
So far this year, U.S. stocks have still outperformed most overseas markets overall. The S&P 500 has gained 13%, while the STOXX Europe 600 is up 10%. Stock markets in Japan and South Korea, however, have performed better than U.S. equities over the same period.
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