Investors are increasingly worried that overvaluations in both bonds and equities could lead to possible bubbles, according to the BofA Merrill Lynch Fund Manager Survey for April.

A net 25% of the global survey’s 145 respondents said that global equities are currently overvalued, up from a net 23% in March and a net 8% in February. Still, it hasn’t reached the level of concern expressed in 1999, before the bubble burst.  At that time, a net 42% of investors surveyed were concerned about overvaluations.

bubbleHowever, the level of concern for overvaluations within the bond markets reached a new high in the global survey’s history, with a net 84% of respondents saying that bonds are overvalued, up from a net 75% in March. At the same time, a net 13% believe that “equity bubbles” are the biggest tail risk markets face, up from 2% in February.

More than two-thirds (a net 68%) of the global respondents said that the United States is the most overvalued region, while all other regions, including Europe and Japan, remain undervalued. Most (85%) of the survey respondents expect the Federal Reserve to raise rates this year, at a time when the European Central Bank and the Bank of Japan are engaged in monetary stimulus.

“April’s survey offers further proof that global investors are front-running global monetary policy,” chief investment strategist Michael Hartnett said in a press release. Manish Kabra, European equity and quantitative strategist, added that the firm is “seeing a form of rational exuberance in Europe where a positive view on stocks is supported by fundamentals — but investors no longer believe valuations are cheap.”

As the Fed’s Open Market Committee starts to tighten monetary policy, 18% of the respondents said that currencies are most vulnerable to volatility, up 5 percentage points from March. A net 13% said the U.S. dollar is overvalued, “a big swing” compared with February, when a net 12% said it was undervalued.

A total of 145 asset managers, managing $392 billion, participated in the global survey.

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