Thanks to the weak dollar, global fund managers are more underweight U.S. equities than at any time since November 2007.
Not since the year before the financial crisis have U.S. equities been so underweighted by fund managers, relative to stocks in the euro zone and emerging markets.
According to Bank of America Merrill Lynch's monthly fund managers survey, the allocation to U.S. stocks by global fund managers fell to net 28 percent underweight, the largest underweight since November 2007. At the same time, those overweight in emerging markets stocks is the highest since December 2010.
BofA analysts blame the weak U.S. dollar, which the fund managers now see as the most undervalued since December 2014. The dollar index is down 10 percent since the beginning of this year.
The S&P 500 , representing U.S. large caps, is up 11 percent since the beginning of the year, while the EEM, iShares MSCI Emerging Markets ETF is up 30 percent.
A majority of the fund managers, 54 percent, view volatility as the most undervalued asset. Bitcoin was viewed as the most crowded trade, followed by Nasdaq.
As recently as March, long U.S. dollar was viewed as the most crowded trade.
BofA surveyed 181 fund managers between Sept. 1 and 7.