Fund managers are the most bullish they have been on global equities they have been in a decade, with 67% overweight the asset class, according to the February BoA Merrill Lynch Survey of Fund Managers, which surveyed 188 fund managers with total assets of $569 billion under management. This is up from 55% in January and 40% in December.

In step with this, the appetite for bond and cash allocations is decreasing, with 66% underweight bonds, up from 54% in January. The spread between equity overweights and bond underweights is the largest it has been since the survey began.

Investments in emerging markets have also decreased dramatically, with only 5% overweight emerging markets, down from 43% in January and the average 28% it has been since this question was introduced.

Interest in developed nations has risen, with 11% overweight eurozone equities, compared to 9% underweight the asset class in January. And 34% are overweight U.S. equities, up from 27% in January and 16% in December.

Further, 58% expect the world’s economy to strengthen in 2011, up from 55% in January, and 68% expect corporate profits to rise 10% or more in 2011, up from 57% in January and 45% in December.

“Unusually higher risk appetite has been accompanied by a dramatic downsizing in asset allocation to emerging markets, as surging global growth expectations have increased the value attractions of developed market alternatives,” said Gary Baker, head of European equities strategy at BoA Merrill Lynch Global Research.