FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

Three out of four fund managers say going long U.S. tech and growth is the most crowded trade, and nearly the same amount believe the stock market is overvalued, the latest Bank of America fund managers survey finds.

At 74%, it is the highest reading ever in the monthly survey to say a particular trade is overdone, and BofA strategists called tech and growth the "longest 'long' of all-time." The July survey comes as the Nasdaq and many tech names have gone into a reversal after hitting all time highs Monday.

Stocks like Amazon, Facebook, Tesla andAdobe, notched new highs Monday before sliding to close lower Monday. The Nasdaq continued to decline and wasdown nearly 2% Tuesday.

The 71% of the managers who say stocks are overvalued, however, is below a recent reading of near 80%.

A majority, 72%, expect stronger global growth, the highest since 2014, but their conviction for the strength and duration of the recovery is low. Just 14% now believe the recovery will be a V-shaped bounce, while 30% now see a W-shaped recovery, up from 21% in June. A U-shaped recovery is expected by 44%, consistent with last month.

Fund managers have raised their cash level to 4.9% from the survey average of 4.7% , as investors say they are cautious on the virus, the macro picture and the U.S. election. A second wave of Covid-19 is seen as the biggest risk to markets by 52%.

While investors have seen the presidential election as a risk, 34% plan to take no action in the run up to the November vote. Another 31% are reducing risk exposure, 15% are buying volatility and 13% are selling the U.S. dollar.

Asset allocations remain long health care, the U.S., technology, and bonds. They are short energy, the U.K., banks, and industrials. The allocation to commodities, at about 5 percentage points, is now the highest since July, 2011.

The best contrarian trade was see as going short tech, while the best contrarian longs are energy and banks.

There were 210 fund managers participating in the survey.

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Technology has become most crowded trade ever, the 'longest long of all-time,' according to a BofA survey - CNBC