The exposure level dropped to a net 20% underweight in the US in July, having been a net 15% in June.
Meanwhile, relative positioning to US versus the rest of the world (the average of the eurozone, emerging markets, Japan and the UK) fell to its lowest level since November 2007 at -40%.
Replacing the US, global fund managers significantly upped their exposure to Japan, rising from net 1% overweight in June to a net 28% overweight in July.
While average cash balances fell from 5% last month to 4.9% in July, the level remains above the 10-year average of 4.5%, with managers explaining this overweight cash stance as being down to their bearish views on markets (25%) and preference for cash over low-yielding assets (20%).
Global fund managers significantly upped their exposure to Japan, rising from net 1% overweight in June to a net 28% overweight in July
“Fund managers’ biggest fears are a shock coming from bond markets or central banks,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch. “Too many investors see the Fed as a likely negative catalyst.”
The survey also showed fund managers remain bullish on Europe, with a net 51% expecting the European economy to strengthen over the next 12 months.
Ronan Carr, European equity strategist, said: “Investors expect eurozone inflation to rise and find monetary policy too stimulative, putting the ECB’s signalling powers to the test.”
Some 207 global managers with assets under management of $525bn (£402bn, €455bn) took place in the survey, which was conducted between 7 and 13 July.