With China replacing Greece as the central concern for global fund managers, institutional investors are reducing their expectations for global growth, according to the BofA Merrill Lynch Fund Manager Survey for August.

A recession in China is now rated as the number one “tail risk” by 52% of respondents, the survey found, and confidence in the global economy has retreated, with 53% of investors saying that the global economy will strengthen in the coming year, down from 61% in July.

Amid these growing concerns, fund managers have curbed their allocations to emerging market equities to their lowest level since April 2001, according to the survey. More investors say global emerging markets are the region that they most want to underweight, it reports; whereas Europe is the region they most want to overweight.

“Investors are sending a clear message that they are positioned for lower growth in China and emerging markets,” says Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, in a statement.

In addition, allocations to the energy sector are down to their lowest level since February 2002, Merrill reports. Indeed, ian “anti-commodities stance is evident with moves out of energy and materials, while defensive weightings increase,” it notes.

The survey also notes a rising consensus that the U.S. Federal Reserve Board will raise rates in the third quarter.

The latest survey, which was carried out between Aug. 7 and 13, involved an overall total of 202 panelists with US$574 billion of assets under management.