The number of institutional investors taking “above normal” risk has risen to its highest level since January 2006, according to Bank of America/Merrill Lynch’s April survey of fund managers.

Michael Hartnett, the chief global equities strategist at BofA/Merrill Lynch Global Research described the thinking as a “Goldilocks scenario of above trend growth and benign inflation."

According to BofA's [BAC] survey, which was released Monday, more than half of institutional investors say that they are overweight in equities, up from 33% in February, and 71% of respondents expect corporate earnings to top 10% in the coming year.

At the same time, 42% of fund managers don’t expect a rate hike by the Federal Reserve until at least 2011.