Global investors are currently holding 5.7% of their portfolios in cash, up from 5.5% in May and the highest level since November 2001, according to the latest Bank of America Merrill Lynch Fund Manager Survey.
The new poll, conducted last week, found risk appetite and global equity allocation at four-year lows.
Investors' risk aversion was consistent with recession, yet profit expectations rose to a six-month high and global inflation expectations to a one-year high, according to the survey.
"While corporate bond and U.S. stock prices are at record highs, investors have a mountain of cash, which means negative summer events could thus quickly become tradable buying opportunities," Michael Hartnett, chief investment strategist at the bank, said in a statement.
Bank of America noted that average cash balances above 4.5% generated a contrarian buy signal and cash balances below 3.5% a contrarian sell signal.
Twenty-seven percent of investors polled cited long quality stocks as the most crowded trade. Fourteen percent said long cash was most crowded, 12% cited short emerging markets and 11% said long U.S. dollar.
The June survey showed that global investor positioning shifted from May to June with rotation out of discretionary, energy and equities into U.K., healthcare/pharma, bonds, industrials and commodities.
Thirty percent of investors continued to consider the prospect of Britons' voting the exit the European Union on June 23 the biggest tail risk by far, followed by 18% who worried about quantitative failure and 15% who considered China devaluation/defaults as the biggest tail risk.