208 Fund Managers With $607B In AUM Were Surveyed; Here's What They Said

Bank of America released a report this week on the results of its most recent monthly Fund Manager Survey. The survey’s 208 participants control a combined $607 billion in assets.
The results
Survey respondents indicated that the global economic environment continues to be centered around global growth, higher interest rates and a stronger U.S. dollar. Fund managers also seem to be exercising a bit of caution when it comes to the markets, indicating a 4.5 percent cash level in May, the highest cash allocation in 10 months. Current stock and bond allocations are also at their lowest levels in six to nine months.
Rate hike predictions
According to the survey, more than half of fund managers believe that the Federal Reserve will issue its first rate hike no sooner than 4Q15. Recent earnings weakness is largely perceived as an anomaly, and inflation expectations are at a 10-month high.
Other notes
U.S. equity allocation came in at its lowest monthly level since January of 2008. Consumer Discretionary allocation saw its biggest monthly drop since September of 2009.On the flip side, the Energy sector saw its largest surge in allocation since June of 2007.

However, Consumer Discretionary and Banks remain the most over-owned stocks, while Energy and Materials remain the most under-owned.

In the past year, the Consumer Discretionary Select Sector ETF XLY has outperformed the S&P 500, surging more than 20 percent.

The Financial Select Sector SPDR ETF XLF has traded mostly in-line with the market, and both the Energy Select Sector SPDR ETF XLE and the Materials Select Sector SPDR ETF XLB have lagged the S&P.