Fund managers have turned negative on commodities for the first time since the depths of the global bear market, amid growing fears of a second wave of economic hardship.

More investors are underweight on commodities than overweight for the first time since March last year, with money being put instead into bonds and cash, a poll by Bank of America Merrill Lynch said.

The rapid decline in commodities' popularity since May, when investors positive on commodities outweighed bears by 20%, reflected a collapse in confidence in the global economy, with most fund managers now turned around to forecasting a weaker economic outlook.

"Cooling global growth expectations fed a further unwind in commodity positions," the bank said.

China and inflation

The decline in sentiment was particularly notable in expectations for China, a huge buyer of commodities including soybeans and vegetable oils, of which it is the world's top importer.

"Since May… the proportion of respondents predicting a weaker Chinese economy has surged to a net 20%," BoA Merrill Lynch said.

Furthermore, expectations of inflation have "fallen back sharply" for all major regions, leaving only a small majority still believing that central banks are being too lax in their monetary policy.

Commodities, which should in theory rise in value along with inflation, are often a popular hedge in times of soaring prices.

'Double-dipped'

On stock markets, investors have also cut back exposure to the materials sector, although by a small amount, leaving them on average with a small underweight position.

Financial shares remain considerably less popular, with pharmaceuticals – a classic defensive sector - growing fastest in investors' affections.

"Growth and profit expectations have double-dipped", said Michael Hartnett, the bank's chief global equity strategist.

However, riskier assets "will have a much better third quarter" if forthcoming data fails to confirm investors' worst expectations.

The comments come at the start of the US second quarter earnings season, which Alcoa kicked off late on Monday with better-than-expected results.