Global asset managers’ cash holdings have fallen to a record low in a sign of investors’ bullishness about the AI-fuelled stock market rally, despite recent jitters over big tech valuations.

Average cash holdings in portfolios dropped to 3.3 per cent in December, down from 3.7 per cent in November, according to a closely watched survey of fund managers by Bank of America — the lowest level since the survey began in 1999.

Investors have poured money into stocks and commodities, with a net 42 per cent of fund managers overweight equities, the highest level since 2022, the survey showed. The proportion of fund managers overweight technology stocks also reached the highest level for more than a year, despite benchmark indices already being heavily weighted towards the sector.