Bank of America Merrill Lynch released its latest fund manager survey for the month of February. Overall, sentiment remains strong, but some have concerns over valuation. Here were the three most interesting charts. Source: Bank of America Merrill LynchNot much has changed, but sentiment has returned to a more acceptable level for tech, whereas managers are hastily buying up the banks. Dollar trade seems heavily concentrated, but I’m anticipating that there will be an inversion of sentiment at some point.Source: Bank of America Merrill LynchCash levels seem to be dropping, as fund managers look to deploy capital as markets continue to trend to new heights, which is nothing unusual. It’s worth noting that the average cash balance averaged at 4.5% over the past 10-years, so there’s still dry powder left.Source: Bank of America Merrill LynchThe latest survey points to 39% of fund managers anticipating some tax reform by the end of the year, which means that a decent chunk of the market is buying in anticipation of some sort of tax holiday and reduction in corporate tax rates. I haven’t embedded tax rates of 15% to 20% in any of my financial models, but I would be emboldened if such an event were to occur. Key takeaways, decent chunk of bidding is driven by expectation of tax reform, and missing out on the next market rally. Managers continue to complain about valuation, but are buying stocks in this environment anyway. Sector allocations similar to prior survey, but with heightened weightings in technology, which is not surprising given large cap tech’s relative out-performance in the past several weeks (AAPL, GOOGL, FB, MSFT).