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A record proportion of investors reckon stocks are overvalued, with the US leading the way as the most over-priced, Bank of America Merrill Lynch said on Tuesday.

BofA’s March survey, which polled 200 investors with $592bn in assets under management, showed that equity allocations are up to 2-year highs, with a net 34 per cent of investors pegging stocks as overvalued.

The perception varies by region, with consensus considering US equities as being by far the most expensive globally, with net 81 per cent saying they are overvalued. Meanwhile, emerging market and eurozone stocks are seen as undervalued.

US stocks have been pushing deeper into record territory since Donald Trump won the US presidential election in November — on expectations that he would deliver on his campaign promises of fiscal stimulus, tax reforms and softer regulation. Valuations have crept higher as a result, with the S&P 500′s forward price-to-earnings ratio rising to its highest level earlier this month since 2004, according to FactSet data.

The survey published on Tuesday also showed that 36 per cent of those polled think higher interest rates will be the most likely catalyst to end the 8-year equity bull market. The average cash balance slid to 4.8 per cent, from 4.9 per cent previously — with an above 4.5 per cent reading suggesting a contrarian buy signal for equities.

Monthly changes to investor positioning from February to March, showed a rotation out of US, energy names, bonds and the UK and a rotation into emerging markets, utilities, staples and broad equities.

Emerging market stocks have advanced in the past week after the Federal Reserve lifted rates in March but signalled that further rate increases would be gradual.

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