Over one-third of investors surveyed by Bank of America Merrill Lynch have held hedging measures against a sharp fall in equity markets over the next three months. \u201cInvestors are well-hedged but not positioned for a breakdown in trade talks,\u201d said BofA ML in May 2019 global fund manager survey report. While emerging markets remain the most preferred region, with net 34% overweight, while the UK remains the least favourite, with net 28% underweight. Key risks include trade war which tops the list of tail risks, followed by a China slowdown and US politics. A net 5% of FMS investors are expecting global growth to weaken over the next year; two-thirds of those surveyed do not expect a global recession until the second half of 2020 or later. \u201cFMS investors think US equities would need to fall to as low as 2,305 on the S&P500 before the Fed would cut the Fed funds rate,\u201d BofA Merrill Lynch said. \u201cFMS investors are well-hedged but not positioned for a breakdown in trade talks. Also, investors see little reason to \u2018buy in May\u2019 unless the 3Cs \u2013 credit, the consumer, and China \u2013 quickly surprise to the upside,\u201d said Michael Hartnett, chief investment strategist. With regard to interest rates, 7 out of 10 expect interest rates to be broadly range-bound over the next year (between 2-3%), whereas only 4% expect yields to return to below 2%.