Professional investors see global growth prospects at their lowest level since Brexit as fears of a trade war surge, according to the latest Bank of America Merrill Lynch Fund Manager Survey.
On a broad level, the monthly gauge shows waning confidence in the bull market even as money continues to flow into stocks. Low-volatility bets that had reflected the market's benign nature have faded from popularity after detonating in early February, while more investors move to defensive positions, including a rush to banks.
"Cracks in the bull case are starting to emerge, with fund managers citing concerns over trade, stagflation and leverage," Michael Hartnett, chief investment strategist at BofAML, said in a statement. "Investors have yet to act on these fears, however, as rates and earnings are keeping the bulls bullish."
Indeed, the market has managed to steady itself after an initial inflation scare sent major averages into correction territory. The S&P 500 is up about 5 percent since bottoming Feb. 8 but overall had gained just 1.5 percent for the year heading into Tuesday trading.
Funds have continued to attract investor money, to the tune of $151.7 billion this year, according to BofAML data through March 14. Cash levels among fund managers edged lower in March from 4.7 percent to 4.6 percent.
But worries are beginning to crop up.