A record 44% of investors in the Bank of America Merrill Lynch's June fund manager survey said equities were overvalued, up from net 37% in the May survey.
"Market vulnerability to profit weakness is very high, with investors' perception of excess valuation coinciding with high global profit expectations," Michael Hartnett, chief investment strategist at Merrill, said in a statement.
The survey was conducted in early June among 210 panelists with $596 billion in assets under management.
Fifty-seven percent of investors said internet stocks were expensive, and 18% saw them as bubble like.
For the second consecutive month, long Nasdaq topped the crowded trade list, mentioned by 38% of investors, up from 26% in May.
Nineteen percent of respondents said long Eurozone equities was the most crowded trade, and 14% said long U.S./EU corporate bonds.
In another new all-time high in the survey, 84% of respondents said the U.S. was the most overvalued region for equities.
At the same time, 48% of investors said emerging market equities were undervalued, and 18% said the same about European equities.
Allocation to U.S. equities rose to net 15% underweight from net 17% underweight in May, while Japan equity allocation plummeted 11 percentage points to net 1% overweight.
Allocation to Eurozone equities remained near two-year highs at net 58% overweight. "With the allocation to Eurozone equities still near historical highs the pause in performance may last a while longer," Merrill's European equity strategist Ronan Carr said in the statement.
