Caution was ripe in June, thanks to mounting Greek debt concerns, a looming rate hike from the US Federal Reserve and talks of “bubble trouble” in Chinese equities.

Global investors have moved away from equities and towards cash this month amid growing concerns for Greece's debt and a default that could see the country leave - or be kicked out - of the eurozone, according to Bank of America Merrill Lynch's fund manager survey for June.

As Greece debt negotiations continued – now presenting a real threat of a “Grexit” following Sunday's breakdown in talks between Greek and EU officials – global investors cut back on their risk appetite. Indeed, the majority of investors surveyed expect a negative resolution of Greece talks, with 15 per cent predicting a “Grexit”, and 42 per cent predicting a default without exit from the eurozone.

Cash levels jumped from 4.5 per cent in May to 4.9 per cent of portfolios in June as the proportion of investors overweighting equities fell from a net 47 per cent to 38 per cent over the month.

“Investors remain bullish on European equities but are increasingly concerned about Greece and higher yields,” said James Barty, head of European equity strategy.

Meanwhile, the US dollar stood out as the most crowded trade as the expected Fed rate hike neared on the horizon. Almost three quarters of investors expect the euro to weaken against the dollar in coming year.

“Higher cash levels show how caution is in the air, with 65 trading days until we expect the Fed to tighten,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

Fears of a bubble in China's equity market also played its part in deterring investors from equities. Seven out of 10 investors said China’s equity market was in a bubble and half see the country's economy weakening.

Elsewhere in the survey, the proportion of investors set to underweight global emerging markets rose from a net 6 per cent last month to 21 per cent in June.

A total of 207 panellists with $562 billion of assets under management participated in the survey from 5 to 11 June.