# VC10X Pulse - DASH FOR CASH: Why Investors Are Moving to Risk-Off Assets, and Cash Levels Now Exceed COVID Peaks

An episode of [VC10X - Investing, Venture Capital, Asset Management, Family Office, Wealth Management](https://invisiblenetwork.ai/podcast/1632806986), 19 Mar 2026, 15 min.

Audio: https://anchor.fm/s/a453ddd4/podcast/play/117180693/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2026-2-19%2F420367781-44100-2-982b27afeac6e.mp3

Global money market funds just hit a record $8.24 trillion in assets — 65% above the COVID-era peak of $5 trillion. This month's Bank of America Global Fund Manager Survey recorded the single largest jump in cash allocations since March 2020. So what's driving it? In this episode, we break down the three forces behind the fastest institutional rotation to cash since the pandemic: the U.S.-Israel war on Iran and its impact on oil markets, a stagflation repricing that shifted consensus in 60 days, and private credit systemic risk that 63% of fund managers now consider the most likely source of the next credit event. KEY DATA REFERENCED → BofA Global Fund Manager Survey, March 2026 — 210 managers, $589B AUM → ICI / Crane Data — MMF assets $8.24T (Feb 2026) → Brent crude: $70 → $102 in under three weeks → Berkshire Hathaway cash: $381.7B — an all-time record → Shiller CAPE ratio: 39.42x — only exceeded during the dot-com peak → Private credit flagged as top systemic risk for 8 consecutive months SOURCES Bank of America Global Research | ICI | Crane Data | IEA | Bloomberg | CNBC | Al Jazeera | Oxford Economics | World Economic Forum | IATA | AAA | FRED LINKS Prashant Choubey - https://www.linkedin.com/in/choubeysahab Subscribe to VC10X newsletter - https://vc10x.beehiiv.com Subscribe on YouTube - https://youtube.com/@VC10X Subscribe on Apple Podcasts - https://podcasts.apple.com/us/podcast/vc10x-investing-venture-capital-asset-management-private/id1632806986 Subscribe on Spotify - https://open.spotify.com/show/7F7KEhXNhTx1bKTBFgzv3k?si=WgQ4ozMiQJ-6nowj6wBgqQ VC10X website - https://vc10x.com For sponsorship queries reach out to prashantchoubey3@gmail.com SUBSCRIBE FOR MORE VC10X breaks down the most important stories in finance, tech, and markets every week. Subscribe for actionable insights. #VentureCapital #Investing #CashAllocation #PrivateCredit #Stagflation #OilPrice #MacroInvesting #FundManagerSurvey #RiskOff #AssetManagement

## Transcript

[0:00] In March 2020, the world was shutting down.
[0:02] Markets were in a free fall, and investors printed to cash
[0:07] parking money in money market funds at a speed that had never
[0:10] been seen before. Six years later, we're not in a
[0:13] pandemic, but the cash is piling up faster.
[0:17] As of last week, global money market fund assets hit a record
[0:20] $8.24 trillion. That's 65% above the COVID peak.
[0:26] And this month, the Bank of America Global Fund Manager
[0:29] survey, covering 210 fund managers running nearly $600
[0:34] billion in assets, just recorded the single biggest jump in cash
[0:39] allocation since March 2020. So what exactly is driving this
[0:43] dash for cash? Is this rational risk management
[0:47] or the first sign of real panic? Today we are going to walk
[0:51] through the three forces behind the shift, what the data
[0:55] actually says and what it means for how sophisticated capital
[0:59] should be positioned right now. And I'll be stress testing the
[1:02] argument throughout because the counterpoint matters here.
[1:06] The Bank of America data also tells us we are nowhere near the
[1:10] capitulation levels that historically mark a buying
[1:14] opportunity. So the question isn't why
[1:16] investors are moving to cash, it's whether they are moving too
[1:20] early, too late, or just at the right time.
[1:23] Let's find out. First, let's establish the
[1:27] baseline, because the scale here is not incremental, it's
[1:30] structural. The Investment Company Institute
[1:33] reports that total US money market fund assets stood at
[1:36] $8.24 trillion as of February 2026.
[1:41] For context, in April 2020, at the peak of COVID era flight to
[1:46] safety, that figure was 5 trillion.
[1:49] This month's reading is 65% higher.
[1:52] And here's the number that really focuses the mind.
[1:55] Three months ago, January 2026, fund managers were net 13%
[2:01] underweight cash. The conventional positioning was
[2:05] yields are falling, risk assets are working, stay deployed,
[2:09] right? But February, that had shifted
[2:12] to a modest 4% underweight by March.
[2:15] This week it flipped to a net 8% overweight.
[2:19] That is a 20 point swing in 60 days.
[2:24] And that swing is notable, but let's keep it honest.
[2:27] The Bank of America note itself says that the Ositioning
[2:30] indicators remain well above the level seen at prior market
[2:34] bottoms. A net 8% overweight in cash is
[2:38] not capitulation, it's caution. There's a meaningful difference
[2:42] between those two things. We are not yet at the Uber beer
[2:46] signal that historically marks a generational buying entry.
[2:50] And that nuance is what makes this analytically interesting.
[2:53] We are not in panic. We are in a measured, deliberate
[2:56] rotation, which is arguably more informative about the macro
[3:00] regime than outright fear would be.
[3:02] So let's get into why the most immediate catalyst for this risk
[3:06] of rotation is something that wasn't on most 2026 investment
[3:10] outlooks published in December. That is the US, Israel, Iran
[3:14] war, which began on February 28th.
[3:16] The economic consequences have been swift.
[3:19] The Strait of Hormuz A-21 nautical mile passage between
[3:24] Iran and Oman carries roughly 20 million barrels of crude oil per
[3:29] day. That's approximately 20% of
[3:31] global oil supply and 1/4 of all oil traded by sea.
[3:37] Since the conflict began, marine traffic through the Strait has,
[3:41] in the words of energy traders and insurers, been functionally
[3:45] impaired. The numbers here are stock.
[3:48] Brent crude was around $70 a barrel in late February.
[3:52] It's now trading at around 102, a 40% move under 3 weeks.
[3:58] US average gasoline prices have gone from 292 a gallon to 379.
[4:04] Diesel has crossed $5 for the first time since 2022.
[4:08] And jet fuel, which matters enormously for airlines,
[4:11] logistics and by extension corporate earnings, is up 83% in
[4:16] a single month, according to IATA.
[4:19] The International Energy Agency called this in March report the
[4:22] largest supply distribution in history of the global oil
[4:25] market. Bank of America's own economist
[4:29] flagged something worth noting here.
[4:31] A key risk to their base case is that nonlinear effects could set
[4:36] in. If the oil shock is large and
[4:39] sustained, a big spike in prices would likely lead to a
[4:42] meaningful tightening in financial conditions.
[4:45] That's the transmission mechanism in the market is
[4:47] pricing right now, and it's rational.
[4:50] There's also a secondary effect that the audience needs to hear.
[4:54] Higher energy prices could become a bottleneck for AI
[4:57] capital expenditure. The hyperscaler build out the
[5:00] data centers. The commute clusters runs on
[5:03] power. If the economics of energy shift
[5:06] materially, the ROI case for AI infrastructure cycle get stress
[5:10] tested. That's a Direct Line from a
[5:13] geopolitical event to the valuations of companies
[5:15] dominating. The NASDAQ and Bank of America
[5:18] also makes the comparison to 2022, which is the right
[5:22] reference point. While $100 oil price is
[5:25] unsettling the inflation pressure, the stock market and
[5:29] corporate earnings are each in a better position today than in
[5:32] March 2022. That is the last time oil
[5:35] crossed this level during Russia invasion of Ukraine.
[5:39] Oxford Economics has modelled a less severe scenario where oil
[5:43] averages around 100 for two months.
[5:46] In that case, you shave a few tenths of a percentage point off
[5:49] global GDP, but you avoid a recession.
[5:52] Duration is everything. Short conflict control
[5:55] disruption manageable. A sustained closure of this
[5:58] trade changes the calculus entirely.
[6:00] The market is pricing uncertainty about the duration,
[6:03] not a known outcome, and uncertainty historically is what
[6:07] sends capital to the sidelines. Now.
[6:10] The second driver is what the oil shock is doing to the macro
[6:13] narrative. The word stackflation has
[6:16] reentered the mainstream conversation for the first time
[6:18] since 2022. And this time, the fund manager
[6:21] survey data captures exactly how quickly consensus has shifted.
[6:25] And it's remarkable. In January, net 38% of managers
[6:30] expected stronger global growth. By March, that's collapsed to
[6:33] net 7%, essentially neutral. Meanwhile, the inflation reading
[6:38] has gone the other direction. In January, the net inflation
[6:41] expectation was -3%, a slight lean towards deflation.
[6:47] By March, that figure is plus 45%.
[6:50] That is not a gradual realization.
[6:52] That is a shock repricing. And 51% of managers are now
[6:56] positioned for the stacflation scenario.
[6:58] Below trend growth, above trend inflation.
[7:01] The worst performance environment for a central bank
[7:04] to navigate. There's an important Cadwink
[7:06] point to make here. Stacflation is brutal because it
[7:09] presents the Fed with two problems that demand opposite
[7:12] solutions. You can choose the economy to
[7:15] address the globe throwdown, but that accelerates inflation.
[7:18] Or you can slow things down to address inflation, but that
[7:21] deepens the growth problem. There's no clean policy response
[7:25] here. That's what makes the world
[7:26] dangerous. And you see directly in rate cut
[7:29] expectations, fund managers pricing lower.
[7:32] Short term rates have dropped to a net 17%, the lowest reading
[7:36] since February 2023. If oil stays elevated, the Fed's
[7:40] rate cutting cycle effectively pauses.
[7:43] That revokes a key tailwind that had been supporting equity
[7:47] valuations to 2025. The market that was priced for
[7:50] easing now has to reprise for a hold or worse for a tightening.
[7:55] And here's where I want to push back slightly on the 1973
[7:58] framing. We are not in 1973, entrenched
[8:02] above target inflation, stagnating growth, a broken
[8:05] policy framework. None of those are fully present
[8:07] today. The stagflation thesis is a risk
[8:10] scenario, not a base case. 44% of managers still see a soft
[8:15] landing, 46% see no landing at all.
[8:18] What we are seeing is a regime transition from boom to
[8:21] defensive, not from boom to bust.
[8:23] And that regime transition has a very specific portfolio
[8:26] footprint. Managers are rotating out of
[8:28] consumer discretionary and out of banks and into healthcare.
[8:33] Staples and cash. Commodities are the highest
[8:36] overweight since April 2022. Gold is tied as the most crowded
[8:41] trade. This is a textbook defensive
[8:43] rotation executed by professionals at scale in real
[8:47] time. The third driver is more
[8:49] structural and more ominous from systemic perspective.
[8:53] Private credit, a $1.7 trillion asset class that barely existed
[8:58] A decade ago, has now been identified by fund managers as
[9:01] the most likely source of systemic credit.
[9:03] Even for 8 consecutive months this month, that reading is 63%
[9:09] at record high. Think about what that means. 8
[9:13] months running. Not a one off concern.
[9:16] Not a quarterly belief. A sustained majority held
[9:19] conviction that the largest and least transparent corner of the
[9:22] credit market is where the next crisis is most likely to
[9:25] originate. And the supporting data is
[9:27] deteriorating fast. The Bank of America financial
[9:30] market stability risk indicated moved from -1.8 in January to
[9:37] just 1.2 this month. Six of its seven sub components
[9:41] got worse. And the default risk indicators,
[9:44] the percentage of managers who believe the defaults are above
[9:47] normal, tripled in 30 days, from 17% in February to 46% in March.
[9:53] There's a critical nuance here. 63% of managers saying private
[9:56] credit is most likely source of a systemic event is a different
[10:00] statement from saying a systemic event is imminent.
[10:05] High yield credit spreads have not yet blown out in a way that
[10:08] would signal actual stress in the system.
[10:11] Corporate fundamentals remain, by most measures, healthy.
[10:14] The risk is real, but the timing is unknown.
[10:17] And in private credit contagion moves slowly until it moves very
[10:21] fast. That asymmetry, slow then fast,
[10:24] is recisely why sophisticated allocators are building cache
[10:27] buffers now rather than waiting for confirmation.
[10:30] And you can see that in the one data point that may be the most
[10:34] credible signal of all. Berkshire Hathaway is sitting on
[10:38] $381.7 billion in cash. That is more than twice the
[10:44] previous record. Warren Buffet has never held
[10:46] this much cash in the company's history.
[10:49] And here's the valuation context.
[10:50] The Schiller Cape ratio, the cyclically adjusted price to
[10:54] earnings ratio, currently sits at 39.42 times.
[10:58] It has only been higherduringthe.com bubble of
[11:01] 1999 to 2000. What that tells you is that the
[11:05] market was not cheap going into the shock of 40% oil spike,
[11:09] hitting the 39 * G APE market into a stagflation, repricing
[11:15] with private credit systemic risk at a record high.
[11:18] That combination is what you are managing against right now.
[11:22] Let's drop the threads together and talk about what professional
[11:26] capital is actually doing. Cash and money market allocators
[11:30] are at their highest monthly jumps since March 2020.
[11:33] Commodities are at the highest O weight since April 2022, at a
[11:38] net 34%. That's the inflation hedge in
[11:41] action. Emerging market equities are at
[11:44] their highest O weight since 2021.
[11:46] Counterintuitive given the energy exposure, but a weaker
[11:50] dollar offsets the import cost for many of these markets.
[11:53] Gold is tied as the most crowded trade, and the US dollar is now
[11:58] net 24% underweight, with net 46% of managers considering it
[12:02] overvalued. On the other side, global
[12:05] equities have been trimmed from net 48% overweight in February
[12:09] to net 37% this month. Consumer discretionary is being
[12:14] sold. Banks are being reduced directly
[12:16] because of the private credit contagion risk.
[12:19] Healthcare and stables are being added.
[12:21] Classic late cycle defensive positioning.
[12:23] Textbook execution. And I want to raise the
[12:25] opportunity cost question directly because it matters for
[12:29] this audience. Money market yields have been
[12:31] falling from above 5% in 2024 to below 4% now as the Fed
[12:36] continued cutting rates. Staying in cash has a real cost.
[12:39] The longer capital sits on the sidelines, the larger the
[12:42] opportunity cost compounds. Cash is not a strategy, it's a
[12:46] tactical pause. And the question every allocator
[12:49] has to answer is how long is this pause and what are the
[12:52] conditions that ended? That's right, framing cash is
[12:55] optionality, not a destination. And right now, with $100 oil
[13:00] price at 39 times Cape ratio record private credit system
[13:05] make risk flax and a stagflation repricing that happened in 60
[13:08] days, the option value of cash is unusually high.
[13:12] You are not just sitting on the sidelines.
[13:14] You're buying the right to deploy at better prices.
[13:17] The question is whether those better prices come or not.
[13:20] Let's close with three things to watch.
[13:22] Not predictions, signpost indicators that will tell us
[13:26] whether this rotation deepens or reverses.
[13:28] First, the duration of the Iran conflict.
[13:31] Short disruption, oil prices normalize.
[13:33] The stock creation thesis fades. Cash gets redeployed.
[13:38] Extended disruption. The rericing of risk assets
[13:40] becomes structural. The Strait of Hormuz is right
[13:43] now the single most important variable in global caital
[13:46] markets. Everything flows from it when
[13:49] intended. Second, credit spread behaviour
[13:52] in private credit and high yield. 63% of institution
[13:56] managers have identified private credit as the most likely
[13:59] systemic risk source for eight straight months running.
[14:03] When perception becomes consensus at that scale, the
[14:05] feedback loop accelerates. You do not need a trigger to
[14:08] become obvious before it becomes a problem.
[14:11] Watch the spreads. Third, the Fed rate cut
[14:15] expectations have collapsed to the lowest level since February
[14:18] 2023. If the oil shock keeps inflation
[14:21] sticky and forces a prolonged pause, it removed the liquidity
[14:24] backstop that has been supporting equity valuations.
[14:28] The Fed's next communication is going to be closely scrutinized,
[14:32] not just for what it says, but for what it can no longer
[14:35] promise. And here is the broader context
[14:37] for everything we have discussed today.
[14:39] A net 8% cash overweight among professionals managing nearly
[14:43] $600 billion is important signal, but it is not yet the
[14:48] definitive signal. Prior major market bottoms
[14:51] required far deeper capitulation.
[14:53] We are in a regime of caution, not of crisis, at least not yet
[14:57] a position for resilience maintained dry powder.
[15:00] But do not confuse caution with certainty, and do not let
[15:03] caution become paralysis. The data is clear, the cash is
[15:07] real. And for the first time since the
[15:09] pandemic, investors at every level of sophistication are
[15:12] asking the same question. What happens when $8.24 trillion
[15:16] get redeployed? That moment, whenever it comes,
[15:20] is where the next cycle begins. That's it for this week.
[15:23] We'll be back next week with another story from the front
[15:25] lines of global investing VC10X.

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