The bank’s April survey confirmed investors’ new preference for eurozone equities, with nearly half (48%) of managers polled now holding an overweight allocation.
It marked a significant increase on the 27% level recorded in March and the highest eurozone equity allocation since early 2016.
Exposure to US equities plunged to its lowest level since January 2008 in the month, with 20% of fund managers surveyed saying they were underweight – down from a net 1% overweight position last month.
The survey, conducted by investment strategists Michael Hartnett and Jared Woodard, said: “Investor love for eurozone stocks surged despite the imminent French election and the eurozone is now the most favoured… global region.
“The April rotation to eurozone stocks from the US equalled the fifth largest since 1999.”
Investors feared a 5% to 10% correction in European markets if far-right candidate Marine Le Pen secured victory in the French presidential election but fears of EU disintegration continued to fall sharply over the past two months.
Ronan Carr, a European equity strategist, raised concerns that the “increasingly bullish” mood in Europe also signalled a high-level of complacency but he did “agree on the allure of Europe’s earnings recovery”.
In the US, fears president Donald Trump will not live up to his campaign promises have grown and sparked a rotation away from the country’s markets.
Only 5% of investors believe Trump will pass his pro-business tax reforms by the summer recess as first promised and 21% of managers feared delays were one of the biggest tail-risks they faced.