Fund managers are more downbeat on emerging market equities than they have been in the last 12 years, as allocations to the sector sink to their lowest levels since November 2001 according to a new survey.
The Bank of America Merrill Lynch (BofAML) August poll showed that while fund managers around the world fled emerging market stocks, they piled into developed markets, with U.K. exposure reaching a 10-year high and U.S. equities peaking at the third-largest overweight in the last 10 years.
Euro zone allocations also surged, reaching the highest level since January 2008, with 17 percent of global asset allocators overweight the region.
Michael Harnett, chief investment strategist and report author at BofAML argued that this en masse shun of emerging market equities has created short –term trading opportunities, while U.K and U.S. stocks now look over-owned.
"The August 2013 global fund manager survey shows that consensus is bullish on global growth, bearish on bonds and hates emerging markets. EM (emerging market) equity exposure fell to its lowest level…since November 2001," said Harnett.
(Read more: Is sentiment towards gold shifting again?)
Some 75 percent of investors think the dollar will strengthen over the next 12 months, down from the record 83 percent seen last month.
"Strategically we tend to agree with these points, but in the near term a dip in the dollar or a rise in bonds prices will probably also catalyze something of a catch-up in emerging market stocks and commodities – both of which are quite dollar-sensitive," said John Bilton, European investment strategist at BofAML.
"We think this could be creating something of a buying opportunity, at least tactically, as it is the most unloved part of the equity market," he added.
BofA's recommendation to snap up beaten up EM stocks is however in contrast to that of J.P. Morgan, which warned investors that it is still too early to pile into the sector on Monday.
(Read more: Buy Europe; Sell Emerging Markets: JPMorgan)
On global growth, 72 percent of investors globally expect to see a stronger global economy in the next year, which is the most since 2009.
Sentiment towards the euro zone improved notably, with no fewer than 88 percent of European fund managers now anticipating the region strengthening in the year ahead, twice the level recorded last month. Respondents increasingly view stronger growth as the likeliest solution to the euro zone debt crisis, rather than interventions by the European Central Bank.
(Read more: Hedge funds are back: 70% see positive July returns)
"We have 64 percent expecting to see in a pickup in corporate earnings, but there is still 55 percent that don't expect to see double digit earnings growth, the gap between the direction and the level is the widest we have ever seen," said Bilton.
The survey polled a total of 229 panelists with $671 billion of assets under management.
—By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave