LONDON (Reuters) – Investors have amassed their largest cash pile since 2001 and cut equity holdings to a four-year low, rattled by worries over Brexit and policymakers’ ability to bolster a fragile global economy, a Bank of America Merrill Lynch survey said on Tuesday.

Even though world bond yields have never been lower and an increasing array of bank deposit rates around the world are now negative, investors are willing to hold more cash in their portfolios than at any time since November 2001.

Risk appetite fell to its lowest level in four years, consistent with recession, although growth and profit expectations hit a six-month high and inflation expectations a one-year high, BAML’s global fund manager survey showed.

“Globally, sentiment remains weak. Global asset allocators are holding the highest average cash balance since November 2001, while equity allocations have dropped to four-year lows,” BAML said on Tuesday.

In a note titled “No Bulls on Bear Mountain”, BAML said fund managers held an average 5.7 percent of their portfolio in cash, up from 5.5 percent in May.

This could quickly present buying opportunities, however, because cash balances above 4.5 percent generate a contrarian ‘buy’ signal for equities, BAML said. Balances below 3.5 percent trigger a contrarian ‘sell’ signal.

The survey of 213 fund managers with $654 billion of assets under management showed that Britain leaving the European Union was the by far biggest ‘tail risk’ for world markets (according to 30 percent of respondents) followed by central banks’ “quantitative failure” super-loose monetary policy (18 percent).

Britons vote on June 23 whether to remain in or leave the EU. Polls show it is a close call, and the betting odds are narrowing sharply too.

Allocation to equities fell to a net overweight 1 percent position – a four-year low – from 6 percent overweight in May. So far this year, global equity funds have posted a net outflow of $106 billion, almost all from developed markets.

On the flip side, investors’ allocation to bonds rose to a net 34 percent underweight from 41 percent underweight the month before. That was the highest in three and a half years.

World bond yields are currently at their lowest level on record, depressed by mounting worries over sub-par growth and anaemic inflation. Germany’s benchmark 10-year Bund yield fell below zero on Tuesday for the first time ever.

The percentage of fund managers who think both stock and bond markets are over valued rose to its fourth highest level since BAML started tracking the data in 2003.

A record net 35 percent of investors said fiscal policy is too tight, BAML said.

(Reporting by Jamie McGeever; Editing by Alexandra Hudson)

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