By Donald Trump’s election win has sparked a rally in US stocks, pushing investors’ equities exposure to jump to its highest level in 11 years.
That bullishness is set to continue, too, according to a Bank of America survey of fund managers. The survey showed fund managers predict US equities will be the best-performing asset next year, fueled by the promise of pro-business policies under Trump.
The survey showed a marked “surge in bulls,” strategist Michael Hartnett said.
Now, a net 28% of those investors expect the US economy to grow at a stronger pace in the next year. That’s a stark shift from last month’s survey, when 22% expected weaker growth.
The survey participants, who manage a combined $503 billion in assets, say that apart from US stocks, global equities and gold will also perform well next year.
Those who made their calls after the election also pointed overwhelmingly to the Russell 2000 index of smaller stocks as the best-performing index for next year.
Small-cap stocks are expected to do well in a second Trump presidency due to their lack of international exposure, which will minimize risk from Trump’s proposals for sweeping tariffs on imports.
Those stocks have also seen inflows since the election, with the Russell 2000 surging almost 6% since Election Day.
US stocks have extended their postelection rally into this week. Investors expect that Trump’s proposed policies, like corporate tax cuts and less regulation, will be more business-friendly and boost earnings.
The widespread rally has sparked massive inflows into Trump trades like bitcoin and Tesla, as well as shares of banks that are expected to benefit from his policies.
The S&P 500 and the Dow Jones Industrial Average have hit record highs since the election.
