Fund managers increased their allocation to cash this month in expectation of market falls, especially in Europe, even though they are more confident than before that the global economy will grow, according to a monthly survey by Bank of America Merrill Lynch.

The survey of 221 fund managers, managing a total of $635bn (€452bn) found that they had increased the average level of their cash balances from 4.2% of their portfolios to 4.7% over the course of June. The shift reverses a tide of growing confidence that grew over the first half of the year, when managers brought their cash balances back down to the long-term average level of about 4%.The cash balance had gone up to 5.5% in December, the highest level since 2003.