Bank of America's latest global fund manager survey reveals investors are the most bullish on equities since 2021. The BofA Bull & Bear Indicator hit a "hyper-bull" reading of 9.4, signaling extreme optimism. Cash levels dropped to a record-low 3.2%, with investors most overweight equities since December 2024 and most underweight bonds since September 2022.

Sentiment toward the macro backdrop improved sharply, with net 38% expecting a stronger global economy—the highest since July 2021. Recession expectations fell to just 9%, the lowest since January 2022. However, this bullishness comes with a warning: net 48% of respondents have no protection against a sharp equity correction, the highest share in eight years.

Geopolitical conflict, an AI bubble, and a disorderly rise in bond yields are cited as the biggest tail risks. Long gold has replaced "long Magnificent 7" as the most crowded trade. For investors, the survey suggests a crowded, complacent market where hedges are scarce, potentially amplifying any future downturn.