The census polled 177 investors with combined AUM of £334.4bn between 2 and 9 April, with 145 managers taking part in the global survey and 83 in its regional counterpart.
Of the global panel, 84% believe bonds are overvalued, up from 75% in March, representing the highest figure in the survey’s history.
On the equity side, 25% of global investors view global equities as overvalued, increasing 2% on the previous month and 17% on the February figure, and is the highest total since 2000.
When asked to name the biggest threat to markets, 13% saw ‘equity bubbles’ as the most significant risk – an 11% rise on the 2% recorded in February.
Regionally speaking, 68% global investors believe that the US market is the most overvalued due to the prospect of a Federal Reserve interest rate rise, which 85% of investors expect to be implemented in 2015.
Europe and Japan are currently seen as undervalued, owing to the respective quantitative easing policies being enacted by the European Central Bank and Bank of Japan.
Accordingly, asset allocation to the eurozone may have dropped from a record 60% of investors that were overweight in the region recorded in March, but remains high at 46%. A total of 37% highlighted the eurozone as the region they most want to overweight during the next year.
Furthermore, 73% of European respondents expect improved corporate profits in the next 12 months. However, 10% see European equities as overvalued.
Likewise 38% of those surveyed said they are overweight Japan, while 22% said they want to shift to overweight position in the market in the next year.
Value investing was picked by 25% of panellists as likely to outperform growth in the coming 12 months, up from 6% of March respondents.
Michael Hartnett, chief investment strategist at BoA Merrill Lynch Research, said: “April’s survey offers further proof that global investors are front-running global monetary policy.”
“We are seeing a form of rational exuberance in Europe where a positive view on stocks is supported by fundamentals – but investors no longer believe valuations are cheap,” added Manish Kabra, European equity and quantitative strategist.
