Buy American ... 

Global fund managers have pegged the U.S. as the world's top equity market region for the first time in five years, according to Bank of America Merrill Lynch's benchmark monthly survey, with allocations rising to the highest levels since January 2015.

The August edition of BAML's Fund Manager Survey, which polled 243 investment managers who run more than $735 billion worth of assets, also noted that while a global trade war remains the market's key "tail risk", a net 67% -- the highest in 17 years -- think U.S. corporate profits will outperform all other markets in the world over the near term.

"Rising corporate leverage concerns say bonds should outperform stocks, while a weaker profit outlook suggests defensives could outperform cyclicals," BAML's chief investment strategist Michael Hartnett said "With investors telling us they are long the US, the Fed and cash, our view remains: peak profits, policy and returns."

The survey noted that August rotations from global investors indicated a preference for safe-haven assets such as cash, which took the average balance on investors' books to 5%, up 50 basis points from last month and 50 basis points above the 10-year average. Investors are also selling commodities, the survey noted, as well as "defensive sectors/regions like materials, energy and UK equities."

With more than 90% of the S&P 500 having reported so far this season, 78.9% have topped expectations, according to Thomson Reuters I/B/E/S data, as collective earnings rise by 24.8%, the best quarter in more than eight years, while third quarter earnings are projected to rise by 22.4% from the same period last year.

Globally, a net 5% of survey respondents think corporate profits will improve in the next 12 months, a figure that's up 14 percentage points from last month but still down 39 percentage points from teh beginning of the year. 

Tech stocks remain the favorite trade in the survey, BAML noted, with the so-called "long FAANG+BAT" trade -- a reference to a group of stocks that includes Action Alerts Plus holdings Facebook Inc. (FB) - Get Report , Amazon Inc. (AMZN) - Get Report , Apple Inc. (AAPL) - Get Report as well as Netflix Inc. (NFLX) - Get Report , Google parent Alphabet (GOOGL) - Get Report as well as Asia tech giants Baidu Inc (BIDU) - Get Report , Alibaba Group Holding (BABA) - Get Report and Tencent Holdings Ltd. (TCEHY) -- topping the survey for a seventh consecutive month.

Shorting emerging market stocks is also a popular trade, the survey noted, even as investors responded prior to the Turkish currency crisis, with allocations to the sector  -- which have fallen 44 percentage points since April -- holding at a net 1% underweight.

Short positions in U.S. Treasuries are the third most crowded traded, BAML said, a position which is reflected in the net 54% underweight in fixed income assets reported in the data and the overall investor view that the U.S. Federal Reserve will continue with its tightening cycle.