Professional capital allocators with more than $450 billion in AUM cut cash levels and lifted their equity exposure by the most in decades this month.

Those were two takeaways from the May installment of BofA’s closely-watched Global Fund Manager poll entitled, appropriately, “In It To Win It.”

As stocks scaled new highs amid an unyielding melt-up exemplified by a furious rally in semi stocks, fund managers increased their allocation to equities from a net 13% Overweight to a net 50%.

As the figure on the left, below, shows, the month-to-month increase was the largest ever.

The figure on the right shows the overall allocation to equities is now the highest since early-2022, which is to say since before the Fed embarked on the most aggressive policy tightening campaign since “Tall Paul” was runnin’ the show.

“Asset allocation in May was very risk-on,” BofA’s Michael Hartnett wrote, editorializing around the results of his flagship report.

Self-reported cash levels dropped to just 3.9% from 4.3% the prior month. That was the biggest monthly drop in more than two years.

Once again, BofA’s cash level “sell” signal is triggered. The median four-week loss for global stocks after two-dozen instances of cash levels slipping below the 4% threshold since 2011 is -1%.

Not surprisingly, “long global semiconductors” grabbed the number one spot on the most crowded trade list this month.

Do note: With 73% of the respondent vote, semis are among the most conviction crowded trades in the history of the survey, as shown on the left, below.

The figure on the right shows you the impact of the historic upswing in forward EPS expectations that accompanied reporting season in the US.

The net share of survey panelists expecting global profits to improve posted its sixth-largest month-to-month increase ever. A net 17% of investors now see EPS improving, versus a net 14% who expected profits to deteriorate last month.

The “bottom line” from Hartnett’s survey is that investors are “all-in on risk-on.” At 7.8, the bank’s pseudo-famous Bull & Bear Indicator is “a chip shot from a ‘sell’ signal,” he remarked.

“The bull capitulation is almost complete, with early-June ripe for profit-taking,” Hartnett went on. Bond yields, he said, will determine the scope and depth of any pullback.