A record number of fund managers see U.S. stocks ( SPY ) ( NASDAQ:QQQ ) ( DIA ) as overpriced, according to Bank of America's February Global Fund Manager Survey. The survey, which included 205 panelists managing $482 billion in assets, found that 89% believe U.S. stocks are overvaluedthe highest level recorded since April 2001.

Despite the sharp rise in sentiment, BofA strategist Michael Hartnett pointed out that an average of 81% of fund managers have considered U.S. equities overvalued throughout the 2020s. Meanwhile, the U.S. exceptionalism trade, driven by a strong U.S. dollar (DXY) and an equity bull market led by the "Magnificent 7" stocks, appears to have peaked.

The survey showed 73% of investors now view it as the most crowded trade, down from 80% in January. Fund managers are also shifting their strategy, putting more cash to work, with cash levels at 3.5%a 15-year low. Investors are rotating into bond-sensitive assets and European equities as fears of a global recession ease.

This article first appeared on GuruFocus .