Credit investors are in a “sell what you can” mood in an environment of rising rates and political tensions, a Bank of America Corp. survey showed, with Goldman Sachs Group Inc. strategists telling clients to switch to cash.

The net overweight position in investment-grade credit has dropped to 16%, the lowest since February 2019, as investors slash bullish bets on bank bonds and boost cash levels, according to Bank of America’s latest European investor survey. That chimes with Goldman’s call on Monday to move to underweight on corporate bonds.

The Wall Street views come as corporate bonds slid on Monday as investors turned to havens, with tensions rising over Russia’s military buildup near Ukraine. That added to losses bond investors have already suffered this year given expectations for interest-rate hikes and the tapering of central bank asset purchases.

“Investors are still terrified over central bank policy errors after a decade of financial repression,” Bank of America strategists said in a note, adding that investors classed it as the No. 1 risk for the third straight survey.

The rush for cash is helped by better yields in short-dated rates markets, according to Goldman’s research team. Rising yields have already prompted a record cash glut in the euro-area economy to the tune of 4.5 billion euros ($5.1 billion).

“Credit needs to rebuild risk premium in the face of reduced policy support and worsening demand technicals,” Goldman strategists including Christian Mueller-Glissman and Cecilia Mariotti said in a note, downgrading credit and lifting cash to overweight in their asset allocation.

They expect the iBoxx euro investment grade index to be 24 basis points wider by the end of the year and the high-yield equivalent to add 69 basis points. A global credit index has seen returns drop more than 4% this year.

The cost of insuring European junk-rated debt surged further on Monday to a 15-month peak, with high-yield funds having lost 2.1% of assets under management, the worst start to the year since 2018. Sales in primary markets have dwindled as deals get pulled.

Reduced central bank support for the European corporate bond market means the Goldman strategists recommend being underweight euro corporate spreads against their U.S. dollar peers both in investment-grade and in junk bond markets.

The mix of higher real yields and an easing of the impact of the Omicron Covid variant should help create some growth momentum in the second quarter of 2022, the strategists said. Without better growth momentum, they see risky assets as more vulnerable to shocks.

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