Prolonged low inflation has sent commodities allocations among fund managers to a four-year low, according to a new survey.
A quarter of respondents to the Bank of America Merrill Lynch's monthly poll on manager sentiment said a commodity collapse is the number one tail risk, an increase from 18% in April.
The panel of 231 managers, with a combined £432bn of assets under management worldwide, have responded to the perceived threat by reducing allocations to commodities and emerging markets and upping their weighting to bonds.
Nearly a third (29%) of those surveyed said they are underweight commodities, an increase from 11% in March.
"May's fund manager survey demonstrates a clear exit from China and assets connected to China, in the shape of commodities and emerging market equities. But it is worth noting that investors are keeping faith in global growth," said Michael Hartnett, chief investment strategist at BofA Merrill Lynch's global research team.
John Bilton, European investment strategist, said managers had been increasingly looking at the continent.
"They are increasingly aware of cheap valuations in European stocks, and concerns over sovereign risk in the region are dissipating," he said.
The percentage of the panel naming EU sovereigns and banks as the number one tail risk dropped to 29% from 42% in April, the report showed.
Aimed at retirement market
Earliest date for inclusion is October 2016
Deal is subject to FCA approval
The number of multi-asset fund launches has accelerated this year, following the introduction of pension freedoms, begging the question: how many vehicles in the burgeoning sector can thrive or even survive in the longer term?
Only a handful able to achieve profitability