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The post-election rally has pushed equity exposure to an 11-year high, BofA says.
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The bank’s fund managers’ research shows that US stocks will continue to rise and will be the best-performing assets by 2025.
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They are also bullish on small stocks, which are expected to avoid any risk from Trump’s proposed tariffs.
Donald Trump’s election victory has sparked a rally in US stocks, pushing investors’ equity exposure to an 11-year high.
According to a Bank of America survey of fund managers, that bullishness will continue. The survey found that fund managers predict US stocks will be the best-performing assets next year, fueled by the promise of pro-business policies under Trump.
The survey showed a clear “increase in bull numbers,” said strategist Michael Hartnett.
Now, a net 28% of these investors expect the U.S. economy to grow at a stronger pace in the coming year. That’s a marked shift from last month’s survey, when 22% expected weaker growth.
The survey participants, who together manage $503 billion in assets, say that in addition to US equities, global equities and gold will perform well next year.
Those who cast their votes after the election also overwhelmingly pointed to the Russell 2000 index of smaller stocks as the best-performing index for next year.
Small-cap stocks are expected to do well during a second Trump presidency due to their lack of international exposure, which will minimize the risks of Trump’s proposals for sweeping tariffs.
These stocks have also seen inflows since the election, with the Russell 2000 up nearly 6% since Election Day.
US stocks have extended their post-election rally into this week. Investors expect Trump’s proposed policies, such as corporate tax cuts and less regulation, to be more business-friendly and boost profits.
The widespread rally has led to massive inflows into Trump trades such as bitcoin and Tesla, as well as into shares of banks expected to benefit from his policies.
The S&P 500 and the Dow Jones Industrial Average have reached record highs since the election.
Read the original article on Business Insider
