Investing.com -- BofA’s August Global Fund Manager Survey found investor sentiment at its most bullish since February, with cash levels falling to a historically low 3.9% of assets under management and equity allocations rising.

The bank said in a note Monday that the probability of a hard landing is now seen as the lowest since January, with “68% predict[ing] soft landing, 22% no landing, [and] just 5% positioned for a hard landing,” BofA said.

Rate-cut optimism is the highest since December 2024.

On asset allocation, global equity overweight positions, at a net 14%, were the highest since February.

Investors are said to have rotated out of Europe to emerging markets, where overweights reached 37%, the most since February 2023, and into sectors such as utilities, energy and financials. A record 91% of respondents said U.S. stocks are overvalued.

The most crowded trade was “long Magnificent 7” at 45%. A majority, 52%, saw no artificial intelligence bubble, while 55% said AI is already boosting productivity.

BofA added that tail risks of the trade war or recession fell to 29%, while fears of inflation and no Federal Reserve cuts rose to 27%.

Regarding commodities, the bank noted that only 9% of investors reported exposure to crypto, with an average allocation of 3.2% of their portfolios, while 48% held gold, averaging 4.1%.

The bank added that when adjusted for those without positions, total survey portfolio exposure stood at 0.3% for crypto and 2.2% for gold.

BofA noted contrarian August trades include going long the U.S. dollar, cash, REITs and healthcare, and shorting stocks, emerging markets, banks and utilities.