Even as tensions continue to flare up amid US-China trade war, global fund managers are bracing for a \u2018steep fall\u2019 in equities, according to a report. A Bank of America Merrill Lynch \u00a0survey found that more than 33%of investors have secured downside protection against a sharp correction in the global equity market over the next three months. This is the highest level in the survey\u2019s history. Fears of a full blown trade war between the US and China continue to worry global investors. \u201cInvestors are well-hedged but not positioned for a breakdown in trade talks\u201d \u00a0Michael Hartnett, Chief Investment Strategist at BofA Merrill Lynch said. Notably, trade war (37%) tops the list of tail risks cited by investors for the 11th time in the past year, followed by a China slowdown (16%) and US politics (12%). According to Hartnett, the 3Cs -Credit, Consumer, and China \u2013 have contributed to investor pessimism in the \u00a0month of May. \u201cInvestors see little reason to \u2018buy in May\u2019 unless the 3Cs \u2013 quickly surprise to the upside,\u201d he said. Also read:\u00a0IndiGo, Spicejet shares rally after bagging slots, Jet Airways plunges 7% Sharing the key macro expectations of investors\u2019 Bank of America Meryill Lynch said that the investors anticipate global growth expectations to hold flat from last month. About 5% of investors are expecting global growth to weaken over the next year, while two-thirds of those surveyed do not expect a global recession until the second half of 2020 or later. Interestingly, only a very small portion of investors are positioned for a sharp rally in interest rates, as 7 out of 10 expect interest rates to be broadly range-bound over the next year (between 2-3%), whereas only 4% of those surveyed expect below 2% yield. Most investors are expecting profits to rebound to a 9-month high, with just about 1% of them saying they expect profits to deteriorate in the next 12 months. However, \u00a0The credit cycle remains the primary concern of FMS investors, with net 41% saying they think corporate balance sheets are overleveraged. \u201cThe percentage of fund managers polled who want corporates to delever rose 3ppt to 46%; 34% want to see increased capex, and 12% prefer returning cash to shareholders,\u201d said the report.