Cautious fund managers move underweight equities for first time in four years

Also buying protection and raising cash

Global fund managers have moved underweight equities for the first time in four years, with allocation to European equities seeing its largest single-month drop, according to a Bank of America Merrill Lynch survey.

The group's July Fund Manager Survey found investors are buying protection against a sharp decline in the stockmarkets while moving underweight equities and raising cash further to 5.8%, its highest reading since November 2011. In the wake of the EU referendum, a record net 44% of fund managers think global fiscal policy is currently too restrictive, and expectations of "helicopter money" over the next 12 months have risen to 39% from 27% in June. Additionally, a third of investors expect another country to break away from the EU in the next three years. 'Buy signal' as managers ra...