The survey, which included 176 fund managers with combined assets under management of $455bn, showed that the average cash balance held by fund managers has risen to 5.1% of their portfolios from 4.8% in December.
Those figures are above the 10-year average of 4.5%, according to the survey.
Managers are holding more cash because they see three big tail risks, which include a trade war or protectionism (29%), a US policy error (24%) and a foreign exchange devaluation or property bubble in China (15%), according to survey findings.
The survey notes that when average cash balances rise above the 4.5% average, a contrarian buy signal is generated for equities. When the cash balance falls below 3.5%, a contrarian sell signal is generated.
Allocations to equities have risen to a 13-month high, with a net 39% of funds overweight in January from a net 31% overweight in December, according to the survey.
On the flipside, the allocation to bonds fell to a 13-month low, from a net 58% underweight in December to a net 63% underweight last month.
Eurozone bought, EM sold
Fund managers in January were buying securities in the eurozone, and in the technology sector, while they sold industrials, emerging markets and commodities.
According to the survey, allocation to eurozone equities surged to a 7-month high, with a net 17% overweight from a 1% underweight in December – the biggest month-on-month jump in two years.
“Fund managers have returned to Europe amid improvement in the macro outlook, but the UK remains the most underweighted region,” Manish Kabra, the bank’s European equity quantitative strategist, said in the survey report.