Investors are counting down to the new year with a lot of bullish cheer for the global economy, corporate profits and equities – especially in Europe and Japan, according to a fund manager survey from Bank of America-Merrill Lynch.
A net 71 percent of fund managers expect the global economy will strengthen next year, up from November's 67 percent and far stronger than 40 percent a year ago, the survey found.
(Read more: Six reasons why 2014 is the year the economy clicks)
Similarly, 41 percent expect global corporate profits are set to rise in 2014, up from just 11 percent a year ago.
All that bullishness has translated into a lot of love for equities, with a net 54 percent of managers overweight on the asset, up from November's 52 percent, a standard deviation above the 10-year average, the survey found.
Eurozone equities may be the biggest beneficiaries, with a net 83 percent of fund managers expecting stronger growth on the continent and a net 43 percent overweight, making it the most preferred equity market for the fourth month running.
It's a sharp about-face from a year ago, when just 2 percent expected stronger economic growth and just 7 percent were overweight the region's equities.
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But it isn't clear how long the love affair may last, with BofA-ML saying it is concerned the region may be flashing an "over-owned" signal. To be sure, it isn't calling a peak just yet.
"While a net 15 percent still see Europe as cheap versus U.S. stocks, Europe is no longer the same deep value call it was at the start of the year," BofA-ML said in a note. "With positioning and valuation gaps closed and sentiment high, European indices are likely due a pause."
Japan equities are also landing under fund managers' Christmas trees, with the net overweight at 34 percent, the highest since May 2006, with the consensus call for a long Nikkei-short yen trade heading into the new year, the survey found.
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Equities in the U.S. haven't really lost popularity either, with a net 7 percent overweight, unchanged from a month earlier.
While more than 20 percent of fund managers view a long call on the S&P 500 as one of the most crowded trades, "positioning is far from stretched at current levels," BofA-ML said.
However, emerging markets didn't get a party invite, with a net 10 percent underweight the segment's equities, the survey found.
Expectations the U.S. dollar will appreciate and a strong aversion to commodity, energy and materials stocks are the main factors keeping it the only regional equity underweight, BofA-ML said.
But it noted, fund managers are sitting on a lot of cash globally at around 4.5 percent of assets.
"Investor refusal to reduce cash balances should prevent any meaningful market correction," it said.
Other surveys also find a bullish view ahead. Charles Schwab's most recent Trading Services Sentiment Survey found only 10 percent of traders are taking a bearish view for the next three to six months, the lowest since the survey began in February 2008. However, one in three surveyed also increased their allocation to cash, suggesting the bullish sentiment hasn't shifted into trading behavior yet, the survey said.
(Read more: Goldman: How Europe outperforms in 2014)
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter