Record 80% of Fund Managers Crowded in Semiconductors – Contrarian Warning

The June Bank of America Global Fund Manager Survey recorded the highest share ever for a single crowded trade. 80% of respondents called long semiconductors the most crowded position in markets, a record for the monthly poll.

The survey, which covers roughly 200 to 400 institutional managers, showed a sharp swing in growth expectations. Only 1% now expect weaker global growth over the next 12 months, down from 14% in May and 36% in April. Inflation fears eased. 45% see higher inflation, compared with 66% a month earlier.

The biggest tail risks managers identified were second-wave inflation, cited by 34%, and an AI bubble at 28%. A disorderly rise in bond yields drew 19%. On AI, 56% said the sector is in a "Boom" stage, while 21% put it at "Euphoria."

Dollar positioning turned less bearish. Fund managers were the least underweight the dollar since March 2025, BofA reported. Gold was seen as fairly valued for the first time since February 2024.

BofA's desk offered contrarian trades tied to the survey. The bank recommended long bonds, European equities, consumer stocks, and REITs. On the short side: commodities, semiconductors, materials, and banks. The advice reflects a view that the crowded semiconductor trade is vulnerable to a reversal if risk appetite turns.

The survey also asked about the 2026 FIFA World Cup. Spain was the favorite among respondents, with 22% backing the team. France got 19%. England, Brazil, and Argentina each collected 8%.

BofA said the overall survey does not signal a major market top. The data points to profit-taking and a more cautious summer posture, not a full risk-off turn.