European Fund Manager Survey: The pessimists are back

Research evidence excerpt

European Fund Manager Survey: The pessimists are back

40% considers a second wave of inflation as the tpearce@bofa.com

biggest risk for markets, up from 26% last month. Paulina Strzelinska >>

Quant Strategist

Rotation out of Europe and into the US MLI+44 (UK)20 7996 7059

A net 4% say they are underweight European equities relative to global markets, while a paulina.strzelinska@bofa.com

net 35% said they were overweight at the start of the Iran war. Meanwhile, a net 20%

report being overweight US equities, compared to a net 22% saying they were

underweight before the war. This constitutes one of the sharpest rotations out of

Notes to readersEurope and into the US on record (with data going back to 1999). 51% expect US

An overall total of 200 panellists withequities to outperform Europe over the next twelve months, up from 29% in April.

$517bn AUM participated in the survey.

Absolute bullishness down but not out 170 participants with $461bn AUM

A net 23% of investors see upside for European equities in the near term and a net 58% responded to the global FMS questions

project upside over the coming twelve months, both the lowest since April last year. A and 92 participants with $209bn AUM

net 52% see upside for European 12-month forward EPS in the next twelve months, responded to the regional FMS

little changed from April, expected to be driven by cost discipline and top-line growth, questions.

rather than margin expansion. Last month’s concern about reducing equity exposure by Survey period: 8th May 2026 to 14th

too much (‘FOMO’) has turned into a worry of reducing equity exposure by too little. May 2026.

Utilities has become the largest sector overweight this month, followed by tech and

banks, while media, autos and personal care are the least preferred sectors.