Mutual fund holdings reveal some investors expect a soft landing.

By The Exchange Team

Bank of America says professional stock pickers still think the U.S. economy will avoid a recession.

Actively managed mutual funds have pro-cyclical consumer discretionary and industrials overweights.

Bank of America's monthly examination of fund holdings revealed a significant underweight in consumer staples.

Consumer discretionary and industrials are sensitive to economic turmoil, whereas staples are defensive.

BofA Securities' head of U.S. equity and quantitative strategy said long-only mutual funds foresee a soft landing.

The group sounded bullish about the economy despite the Federal Reserve's most severe monetary policy tightening since the 1980s.

As prices rose and the Fed hiked interest rates to slow the economy, consumers may have become more stingy.