A decline in world equity markets of 4.9% between July 2 and July 9 has forced investors to sale back their risk taking and return to recession-proof stocks, according to Merrill Lynch's monthly survey of fund managers.

According to the Bank of America unit, average cash balances rose to 4.7% in July from 4.2% a month earlier. A net 11% of respondents are now overweighting pharmaceuticals compared with a net 2% underweighting of the sector in June.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.