Bank of America Merrill Lynch's July poll of global fund managers found that investors' cash hoard stood at 5.8% of their portfolios, a level unseen since November 2001, up from 5.7% in the June survey.
A net 44% of investors considered current global fiscal policy too restrictive, and 39% expected a major central bank to adopt a policy of helicopter money over the next 12 months, up from 27% in June.
Allocation to equities dropped to the first underweight reading in four years, net 1%, from net 1% overweight last month.
The survey revealed that investors were buying protection against a sharp decline in the stock market, which is at a record high.
"Record numbers of investors saying fiscal policy is too restrictive and the first underweighting of equities in four years suggest that fiscal easing could be a tactical catalyst for risk assets going forward," BofAML's chief investment strategist Michael Hartnett said in a statement.
A total of 195 panelists with $537 billion in assets under management participated in the survey conducted in mid-July.
BofA said that average cash balances above 4.5% generated a contrarian buy signal and those below 3.5% a contrarian sell signal.
The survey found investors' positioning contrarian bullish for risk assets — despite the U.K.'s Brexit vote, global terrorism and the S&P Index options (SPX) at an all-time high and the U.S. Treasury yield at an all-time low.
Although growth/profit expectations were flat to negative, only 17% of panelists thought a recession was likely.
Fund managers' most crowded trades were long high-quality stocks, favored by 34%, long U.S./EU corporate bonds, by 20%, and short European banks, by 17%.
According to the July poll, global investors rotated out of the eurozone, banks and insurance and into U.S. equities, industrials, energy, tech and materials.
