As stocks continue to climb ever higher, so has the nervousness among investors who believe that valuations are starting to get out of hand.
In fact, a record number of pros believe believe the market is overvalued, according to a survey of fund managers released Tuesday by Bank of America Merrill Lynch.
In all, a net 44 percent — the difference between those who say the market is overvalued and those who do not — believe equities are too expensive. That's up from a net 37 percent last month and comes over a span when the S&P 500 has added about 1.6 percent. The benchmark is now up 8.5 percent for 2017.
Looking at individual regions, a net 84 percent of fund managers say the U.S. is the most overvalued, also a record. By comparison, the STOXX Europe 600 has gained 7.6 percent this year, while the Nikkei in Japan is up just 4.1 percent and the UK's FTSE 100 has risen 5.2 percent.
"Market vulnerability to profit weakness is very high, with investors' perception of excess valuation coinciding with high global profit expectations," Michael Hartnett, chief investment strategist at BofAML, said in a statement.
The record-high concern about overvaluation coincides with a record exposure that hedge funds have to stocks. Hedge fund portfolios have a 73 percent net long exposure to equities, around the levels of the second quarter of 2015, according to a separate report from BofAML.
Investors also are concerned about the surge in tech stocks, with the Nasdaq at the top of the most-crowded trade list, according to the survey.
For much of this year, investors had been fearing the popularity of the U.S. dollar trade, but that has waned to the point where just a net 7 percent feel the long greenback move is the most crowded.
Europe continues to be a popular place to park money, allocation to equities there at a net 58 percent overweight, which is near a two-year high.
Retail investors also remain cautious about the stock market. Bullishness on the American Association of Individual Investors survey is at 35.4 percent, up 8.5 percentage points from a week ago but still below normal. Bears are at 29.5 percent in the survey, right around the long-term historical average.
Money of late has been flowing heavily to bonds. Fixed income funds took in $16 billion last week, the largest inflow in more than two years, while stock funds lost $1.3 billion, according to BofAML.