Tech still investors' favourite bet as gloom on economy grows - BAML survey

LONDON (Reuters) - U.S. and Chinese tech stocks remain overwhelmingly popular among investors, as they become increasingly wary that global economic growth may slow, Bank of America Merrill Lynch's monthly survey showed on Tuesday.

Investors picked "Long FAANG and BAT" as the "most crowded" trade for the eighth straight month, BAML's September survey found, referring to U.S. tech giants Facebook, Amazon, Apple, Netflix and Google, and China's Baidu, Alibaba and Tencent.

The other two crowded trades were short positions on emerging market equities followed by long dollar, according to the poll.

The survey showed that investors' outlook on economic growth had worsened significantly.

A net 24 percent of those surveyed expected global growth to slow in the next year, up from 7 percent in August. This was the worst outlook on the global economy since December 2001.

Trade war remained the biggest tail risk cited by investors; the fourth straight month this was cited as the biggest fear.

This caution made itself felt in portfolios: the average cash balance climbed to an 18-month high of 5.1 percent, up from 5.0 percent in August.

Investors' allocation to U.S. equities rose to the biggest overweight since January 2015, while allocation to euro zone equities fell to an 18-month low.

Allocation to emerging stocks, meanwhile, tumbled to a 10 percent underweight, the lowest since March 2016, the survey showed.

(Reporting by Helen Reid; editing by Sujata Rao)