Investors maintain largest cash positions since 9/11 as they brace for recession: survey

The Block • April 14, 2020, 4:35PM EDT

UPDATED: April 14, 2020, 4:47PM EDT

Bank of America released its monthly survey of fund managers, offering a grim view of the current macro picture among big money managers.

The BofA April FMS survey, which ran April 1-7, spanned over 180 participants who represent nearly $550 billion in assets under management. The survey captures Wall Street's anxiety about the market with 93% of participants expecting a recession in the next 12 months.

Moreover, 50% of participants are expecting a U-shaped recovery, which typically takes a few quarters to play out, versus 15% of those who expect a sharper, V-shaped recovery.

Source: Bank of America

The S&P 500 has gained more than 26% since March 23 despite the ongoing pandemic. Still, uncertainty hangs over U.S. equities and other risk-off assets given the possibility of a second surge in coronavirus infections which could prolong the shutdown of restaurants, bars, and sporting events that has led to widespread unemployment.

Source: The Block

Market anxiety has pushed investors seeking safety into cash, the survey notes. Cash levels spiked to 5.9%, the highest level seen since the September 11, 2001 terrorist attacks.

In the vein of safety, the most crowded trade among surveyed managers was "long US Treasurys" for the second month in a row. The flight to safety into government debt pushed the 10-year Treasury to record lows last month.

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

Ryan Todd is a research analyst at The Block where he focuses on the convergence of fintech and digital assets. Previously he worked at Deutsche Bank as an equity analyst covering consumer finance and payments companies, and also spent time at ConsenSys exploring the broader Ethereum ecosystem. Ryan holds a BS in Economics and Accounting/Finance from Florida State University, and MS Finance from Vanderbilt University.