Fund Managers' Current Asset Allocation - January
Every month, we review the latest BAML survey of global fund managers. Among the various ways of measuring investor sentiment, this is one of the better ones as the results reflect how managers are positioned in various asset classes. These managers oversee a combined $700b in assets.
Overall, fund managers remain very bullish on risk. In September, exposure to global equities was the second highest since the survey began in 2001; it is only marginally lower now and it has increased every month since October. What is particularly remarkable is how long managers have been highly overweight equities (virtually all of 2013). This is longer than any period during the 2003-07 bull market.
As in December, the spread between exposure to fixed income and equities (117 percentage points) is among the widest ever (chart from Short Side of Long). Treasuries have outperformed SPX over the past four weeks.
Fund managers are not just overweight equity and underweight bonds, they are overweight the highest beta equity (tech, banks, discretionary) and underweight defensives (telecom, staples, pharma) as well as cash.
Their current exposure to technology (+42%) is the highest of all sectors, while their exposure to staples (-32%) is the lowest since 2003. If there is a silver lining, exposure to tech has stayed high as long as 6 months (and as short as one month) in a row in the past....MORE
HT: Abnormal Returns
