November 12, 2019 / 9:40 AM / 24 days ago

UPDATE 1-Investor cash at lowest since June 2013 as optimism rises: BAML

(Adds detail, context)

LONDON, Nov 12 (Reuters) - Fund managers’ holdings of cash dropped in November to their lowest since June 2013 as investors grew more optimistic on global growth, a key investor survey showed on Tuesday.

Cash levels fell to 4.2% from 5.0% the previous month, their biggest monthly drop since U.S. President Donald Trump was elected in November 2016, Bank of America Merrill Lynch’s survey of global managers managing more than $500 billion in assets showed.

Diminishing concern over a global recession and “fear of missing out” had prompted a wave of optimism and a jump in exposure to equities and cyclicals, according to the survey.

Reflecting a more positive investor outlook, global growth optimism surged by the most in 20 years to an 18-month high, it said.

It was the first time in a year that investors wanted more companies to increase capital expenditure rather than reduce debt and improve their balance sheets, BAML noted.

U.S. stock markets have reached record highs in recent weeks on hopes the United States and China are close to striking a trade deal that could help breathe fresh life into the global economy.

Investors still said the trade war was the top tail risk, but that a truce could boost exposure to stocks and cyclicals further, BAML said.

The poll was carried out between Nov. 1 and 7. (Reporting by Tom Arnold; editing by Andrew Heavens, Larry King)

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