At a time when some analysts are saying there's little immediate upside for U.S. stocks, the U.S. market was the third-largest overweight in 10 years, as the managers were optimistic about the strength of the U.S. dollar. While they shunned emerging markets, they poured money into euro zone and U.K. stocks.
(Read more: 'Hindenburg Omen' hovers over Wall Street again)
Managers were more exposed to the U.K. stock market than they've been since December 2002, and overweight for the first time since 2003. Exposure to euro zone stocks was at its highest level since January 2008, with 17 percent of the asset allocators overweight. That clearly has been showing up in the performance of European stock markets.
The S&P 500 has risen 7.8 percent since hitting a low on June 24. But Europe has dramatically outperformed during the same time frame, with Spain and Greece both up 16 percent, and Italy up 15 percent. France is up 14 percent in that time frame, and the U.K. is up 9.7 percent while Germany is up 9.4 percent.
(Read more: Euro zone recession ending? What has changed)
The fund managers' views changed against the backdrop of improving data from China and the euro zone.
Euro zone GDP for the second quarter is expected Wednesday. On Monday, Goldman Sachs raised its expectations for second-quarter growth quarter over quarter to 0.2 percent from a flat reading.
According to the survey, equity allocations rose by 4 percent to 56 percent overweight in August, the highest level in five months. Exposure to bonds was at a 28-month low, and cash was at a relatively high 4.5 percent.
(Read more: Markets want clarity: El-Erian)
Emerging markets remain out of favor, and there was a reported net 19 percent underweight in emerging market equities.
The survey also showed that growth expectations for China bounced from 65 percent negative in July, a multiyear low, to a negative 32 percent. The majority—51 percent—viewed a hard landing in China and commodity collapse as the biggest risk to markets, down from 55 percent in July.
There were 229 managers surveyed, with $671 billion in assets under management.
—By CNBC's Patti Domm. Follow her on twitter @pattidomm.