LONDON, Dec 19 Reuters Investors turned more bullish in December, buying stocks and reducing cash holdings on expectations the U.S. Federal Reserve has finished hiking rates and the global economy will avoid a big recession, a BofA fund manager survey showed on Tuesday.

Investors are at their most overweight equities relative to cash since January 2022, according to the survey of 219 participants with 611 billion of assets under management.

They are still overweight cash, but at their least overweight since April 2021, and their most overweight on equities since February 2022, the survey showed.

A rally in world equity and government bond markets gained momentum last week after dovish comments from Fed chief Jerome Powell fuelled expectations for interest rate cuts in 2024.

Wall Street continued to build on seven straight weeks of gains, the benchmark SP 500 index39;s longest weekly winning streak since 2017.

And in bond markets, government bond yields have fallen further, with 10year yields in the United States and Germany down 40 basis points each this month , .

Fund managers were at their most upbeat since January 2022, especially towards government bonds, according to the BofA survey.

Fund managers had the biggest overweight position in bonds since 2009, and 45 of respondents said bonds were the asset class that would perform the best in 2024.

In terms of risks facing the global economy, a recession or hard landing was at the top of the list of worries for…