Cautious Investors Of a Mind to Sell in May

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A recent survey of global fund managers by Bank of America Merrill Lynch suggested investors are wary of "quantitative failure", recording a sharp drop in appetite for Japanese equities and Eurozone banks and a steady rotation into cash and staples.

The bank's monthly global fund managers survey tracks the views of hundreds of fund managers who collectively have nearly $US500 billion under management.

The note released to clients on Tuesday points out there is a "low conviction" fear of quantitative failure. However, it revealed a jump in cash to 5.4 per cent in April, up from 5.1 per cent in March.

"Cash level is superficially bullish," reads the note. "But rare for cash to jump so much during risk rally". This suggests that investors are worried about the downside but don't see much opportunity on the upside.