Faith in global growth has plunged in recent months, with a sharp drop in the number of fund managers who believe the world's economy will expand in the next year.
The results, contained in the latest Bank of America Merrill Lynch Fund Manager Survey, also show less confidence among institutional investors in corporate profits.
The survey found just 41 percent of managers believing the global economy will expand, while 31 percent see a pullback and the remaining 28 percent either unsure or seeing little growth. That's a huge drop from earlier this year.
Though some 69 percent of companies in the Standard & Poor's 500 have posted better-than-expected earningsfrom the first quarter, the stock market has sputtered and investor confidence appears to have waned significantly.
"A triple dip in growth expectations is reshaping investors' stance on risk," Michael Hartnett, BofAML's chief global equity strategist, said in a statement.
Investor choices appear to be reflecting some risk aversion, with a rotation likely into defensive areas such as pharmaceuticals and staples and out of energy and materials, the survey found.
The faith in the global economy has dropped precipitously from sentiment that a recovery story—driven largely by emerging economies in China, Brazil and elsewhere—was well in place.
In the February survey, a net of some 58 percent expected growth. By April, that number had plunged to 27 percent. In the early May survey, a net of just 10 percent believe the global economy will expand.
The primary culprit for the drop in investor sentiment appears to be Europe, where investors fear that foreign-denominated, or sovereign, debt in peripheral nations such as Greece and Portugal will prevent growth. According to the survey, 36 percent believe sovereign debt is the greatest risk globally.
Because of the global economic pressures, expectations for interest rate hikes also have receded, with 72 percent of respondents now expecting the Federal Reserve to wait until 2012 to start tightening.
Elsewhere, the survey found increased allocation toward emerging markets, despite the likelihood of a slowdown in China, while expectations for tsunami-ravaged China continue to improve, with 38 percent expecting growth.
Also, nearly half of the respondents think the US dollar is undervalued and the euro overvalued.
The survey includes 284 panelists with $814 billion in assets under management.