BofA European Fund Manager Survey

13.10.26, 11:58 BofA - European Fund Manager Survey

 European Fund Manager Survey European cheer, global hesitation 13 October 2026 | Equity Strategy | Europe

Key takeaways European investors expect moderate Europe outperformance vs the US (38%); global investors disagree, with net 23% underweight Less conviction on growth and higher inflation raise earnings bar: 56% cite upgrades; 50% expect them concentrated by sector Net 41% expect cyclical outperformance; Tech tops positioning, Retail is bottom

An overall total of 185 panellists with $512bn AUM participated in the survey. 161 participants with $453bn AUM responded to the global FMS questions and 95 participants with $245bn AUM responded to the regional FMS questions.

Survey period: 2nd Oct 2026 to 8th Oct 2026.

Investors/clients are encouraged to sign up to participate in the Survey. This can be done by contacting Michael Hartnett or your BofA sales representative.

Participants in the survey receive the full set of results for the months in which they participate.

European relative optimism rises, but global appetite falls: A net 44% of respondents expect European equities to rise over the next 1-3 months, but

expected 12-month upside has fallen to 4.53%, the lowest since Jan '25, despite 6.09% expected upside in 12-month forward EPS. Meanwhile, moderate European outperformance vs the US is now the leading 12-month view (38%), replacing in-line performance as the top response. Yet, global investors are moving in the opposite direction: a net 23% would underweight Europe, the most negative reading since Sep '22, while net 8% are currently underweight.

Weaker macro, narrower earnings breadth: A net 22% now expect stronger European growth over the next 12 months, down from 39%, while 66% expect a

higher-for-longer regime. Inflation expectations have reversed (net 3% expect higher inflation), while net 44% expect a higher ECB deposit rate in 12 months. Against this backdrop, 56% identify earnings upgrades as the main route to further equity upside, but 50% expect upgrades to be concentrated in a small number of sectors, versus 43% expecting broad-based upgrades last month.

Cyclical optimism rises, positioning stays selective: Net 41% expect cyclical outperformance, the highest since February, yet only seven sectors are

overweight overall. Technology leads at net 28% and is the second-most crowded sector (31%), while Retail remains the largest underweight at net 47%. Despite 16% expecting Health Care, alongside Financials, to perform best, positioning is net 3% underweight, its lowest since Jul '25. Banks remain net 22% overweight despite being seen as the most crowded theme (38%).

Quality, Momentum and Spain are favoured: Investors expect High Quality, Rising Momentum, Value over Growth and Large Caps to outperform. A net 28%

would overweight Spain over the next 12 months, the highest since May '18, while a net 56% would underweight France, the highest share on record, with 63% citing French fiscal sustainability and the 2027 election cycle as the largest political risk to European equities.

13.10.26, 11:58 BofA - European Fund Manager Survey

European growth: softer optimism, no recession Accessible Version

Exhibit 1: A net 4% of global investors expect lower global growth, versus 8% who Exhibit 2: A net 71% of global investors think the global economy will avoid a r previously expected higher growth. A net 22% of European investors think European over the next 12 months, slightly down from 73% last month. A net 94% of Eu growth will be stronger over the coming 12 months, down from 39% previously investors expect Europe to avoid a recession, up from 86% last month How do you think the region's economy will develop over the next 12 months? How likely do you think it is that the economy in this region will see a recession next 12 months? Net % Expecting Stronger Economy Europe Global 100 Net % Expecting Recession Europe Global 

Source: BofA European & Global Fund Manager Survey Source: BofA European & Global Fund Manager Survey BofA GLOBAL RESEARCH BofA

Exhibit 3: A net 22% of investors expect European economic growth to accelerate over the Exhibit 4: 66% of European investors expect a…