The survey of fund managers with $545 billion in assets found that investors still believe global growth will weaken over the next 12 months, but expectations have improved significantly.
Three in four respondents expect a soft landing or no landing for global growth and the share expecting weaker growth fell sharply to a net 45% from 60% in July.
Cash allocations fell to 4.8% from 5.3% last month and the underweight in equities was cut to the lowest since April 2022. BofA said bearish positioning was a strong tailwind in the first half of 2023, but it was not like that in the second half.
There was a capitulation in REIT positioning to levels last seen during the Global Financial Crisis, the survey found, as investors pivoted to stocks and commodities.