In just the last month, high levels of uncertainty in global markets have taken a toll on a number of fund managers as many investors retreat from risky positions and build up their cash balances, according to a June survey by Bank of America Merrill Lynch.

Eleven percent of a global panel of 260 fund managers with $689 billion in assets under management believe the global economy will deteriorate in the coming 12 months. Not only was that number the weakest reading since last December, but also it constitutes a dramatic shift of 26 percentage points from last month when 15% believed that the economy would strengthen.

That reversal represents the most pronounced change in outlook since the sovereign crisis last summer.

As a result, many managers are pulling out of their riskier investments. Cash balances are up to the highest level since the credit crisis in January 2009 and comprise 5.3% of portfolios.

This month’s less-optimistic outlook comes on the tailwind of uneasy news from Europe and China as Greece prepares for its June 17 elections and after the Bank of China cut interest rates for the first time.

“Investors have taken extreme ‘risk off’ positions and equities are oversold, but we have yet to see full capitulation,” said Gary Baker, head of European Equities strategy at Bank of America Merrill Lynch Global Research. “Low allocations in Europe are in line with perceptions of growing risk levels in the Eurozone.”

Global equities are now at their most undervalued since August 2011 according to 48% of panelists. Almost half, or 45%, believed that Europe was the most undervalued region, up from 27% in May.

The panel was divided on the future of China’s economy in the coming year. The percentage of those who believed that China faced a “hard landing” nearly doubled in a month, rising from 9% to 16% since May.

That sentiment has prompted some to favor action and policy stimulus. On the whole, the majority of panelists agreed that global monetary policy is “too restrictive.” A net 6% shared that view, the highest since December 2008 and a steep shift from 15% of responses in May that called policy “too stimulative.”

"Hopes expressed last month of a policy response have now become expectations. Markets are keenly anticipating decisive action from key policy meetings in June," said Michael Hartnett, chief global equity strategist at Bank of America Merrill Lynch Global Research.

There was a bit of silver lining to the report. Investments in U.S. equities improved with a net 31% overweight U.S. stocks, up five percentage points from May.

Looking to avoid a cyclical downturn, many investors on the panel increased their allocations to pharmaceuticals, utilities, telecoms, and staples from May levels. That matched with reductions in materials, energy and industrials, according to the report.

Bank of America Merrill Lynch Research conducted the survey in conjunction with market research company TNS. Of the 260 panelists, 188 managers with $522 billion in AUM participated in the global survey, and 141 managers with $297 billion in AUM participated in regional surveys.

Mason Braswell writes for On Wall Street.