Amid increased pessimism generally over global growth among investors, fund managers have turned sharply bearish on India and commodities, according to Bank of America-Merrill Lynch's April survey.

A net 18% of global investors are now underweight commodities, the biggest underweight since January 2009. Meanwhile, emerging-market investors switched from a net 44% overweight to a net 27% UW India, and Asia-Pacific portfolio managers have also grown more bearish on the country.

Indeed, Asia-Pacific PMs are more bearish on most countries in the region than they were last month, with the exception of Australia, Hong Kong, Malaysia, the Philippines and South Korea. With regard to Malaysia and the Philippines, they have switched from a net UW to a net OW.

Global respondents to the survey are generally more negative on emerging markets and the eurozone. The lowest number of investors (a net 13%) are overweight EM equities since October 2011, while a net 19% of regional investors expect the eurozone to strengthen this year, down from March’s net 40%.

Lower confidence in eurozone growth is reflected in global investors’ move to a net 8% underweight on the region. Regional investors sharply cut cyclical exposures such as construction (down 38 percentage points), basic resources (down 22 points) and oil and gas (down 17 points) this month, while increasing defensive plays like health care/pharma (up 20 percentage points to a net overweight).

Meanwhile, there is clear confidence in Japan’s new expansionary policy under Prime Minister Shinzo Abe. Every regional fund manager polled expects the economy to strengthen over the next 12 months. Global investors also expect the policy shift to weaken the yen. Their appetite for the currency is now at its lowest since February 2002.

In contrast, bullishness on China is evaporating. A net 13% of regional investors now expect the country’s economy to strengthen in the next 12 months, down from a net 71% in January.

Fund managers’ generally more cautious stance is reflected in their increased cash holdings, which are at the highest level reported by the survey in six months (4.3%).

A total of 252 panellists with $725 billion of assets under management participated in the survey from April 5 to 11. A total of 200 managers, managing $578 billion, participated in the global survey. A total of 125 managers, managing $293 billion, participated in the regional surveys.