MILAN, July 15 (Reuters) - Investor sentiment surged in

July to its most bullish since February, driven by the biggest

jump in profit optimism in five years and a record surge in risk

appetite, Bank of America's latest global fund manager survey

showed.

Cash levels fell to 3.9% in July, a low that triggered an

in-house "sell signal" from the investment bank's strategists.

BofA noted that sentiment was getting "toppy," but added

fund managers' overweight positioning in stocks was not yet at

extreme levels and bond market volatility remained low.

The U.S. bank suggested investors are more likely to stick

to a "summer of hedging and rotation" between sectors rather

than placing big short bets or making a significant retreat, as

"greed is much harder to reverse than fear."