(Reuters) — Expectations over interest rate cuts rather than earnings optimism has made investors the "most bullish" since November 2021, Bank of America's monthly fund manager survey for May showed on Tuesday.

The survey of global fund managers with $562 billion in asset under management found 82% expect the first rate cut by the Federal Reserve in the second half, while 78% say a recession is unlikely over the next 12 months.

The survey showed cash levels fell to a three-year low of 4% from 4.2% the previous month. Stock allocation reached its highest since January 2022, a dynamic that typically reflects strong investor confidence.

However, expectations for global growth fell for the first time since November, with a net 9% expecting a weaker economy over the next 12 months, compared with 11% who expected a stronger economy in the last survey in April.

That said, most investors do not expect recession.

"On the global economy, 78% of FMS (fund manager survey) investors say a recession is 'unlikely' within the next 12 months, in line with last month’s expectations," BofA said.

"For the fourth month in a row, a greater share of FMS investors see a global recession as 'unlikely' (78%) than 'likely' (22%)," the bank said.

In terms of crowded trades, the survey showed participants still believe "long Magnificent Seven" is the most crowded. The term refesg to the seven most valuable U.S. companies, a group that includes Apple, Microsoft and Amazon.

"Long U.S. dollar" was the second most-crowded trade, overtaking "short Chinese equities", the survey showed.

(Reporting by Danilo Masoni and Amanda Cooper; Editing by Lincoln Feast.)