Nearly half of fund managers surveyed by Bank of America Merrill Lynch expect global GDP to fall in 2019 and 55% say they're bearish on both the world's growth and inflation outlook next year.
Why it matters: That's causing many to increase their cash positions, cut back on allocation to stocks and strangely to increase their holdings of emerging market assets.
What it means: Emerging market stocks and bonds are typically thought of as more risky than developed market securities because emerging countries have less deep and less developed capital markets and are often more vulnerable to large swings in volatility.
Yes, but: BAML strategists say that despite the overall wall of worry — the U.S.-China trade war tops the list of biggest tail risks cited by investors for the ninth straight month — EM was the most crowded trade for the first time in survey history. That's even more impressive considering shorting EM was the third most crowded trade just last month.
What they're saying: Julian Howard, head of multi-asset solutions at GAM, said on CNBC in August that the market may have reached the peak of the anti-EM trade.
Go deeper: Brazil's deadly dam collapse could shock emerging markets
