Home >> Banking & Investments

Global Fund Manager Survey

Wednesday, September 16, 2020/ Editor -  


Home >> Banking & Investments
The Rotating Top
United Arab Emirates,  September 16, 2020:
Key takeaways 
•         Rotating Top: investors 'rotating' not 'chasing' stocks following epic 51% rally from March lows
•         The vaccine's the thing: 41% say C-19 vaccine most likely trigger for higher bond yields, investors say Q1'21 likely timing
•         FMS contrarian trades: UK, energy, banks longs (on 10Y >1%); US tech, healthcare, discretionary shorts (on vaccine)
BofA September Global Fund Manager Survey
Bottom line: FMS shows investors 'rotating' not 'chasing' stocks following epic 51% rally from March lows; BofA Bull & Bear Indicator unchanged at 3.9… positioning implies SPX 3300-3600 range holds, and cyclical rotation still in early phase; Sept Zeitgeist… 
• 'It's a bull market': 58% of investors say new bull market has begun (25% in May). 
• 'No longer a recession': 1st time since Feb more investors (49%) say macro in early-cycle phase than recession (37%); net 84% say global growth up next 12 months. 
• 'It's not escape velocity': 61% predict U- or W-shaped recovery vs 20% say V-shaped; 51% still prefer balance sheet discipline vs 37% want increased capex (was 13% in Apr); shows FMS investor doubt on sustainability of upturn. 
• 'Dry powder': FMS cash levels rose from 4.6% to 4.8% (greed <4%, fear >5%).
• 'We're paranoid tech': long US tech most 'crowded trade' of all-time (80%); 'tech bubble' now #2 FMS tail risk after COVID-19 'second wave'; 1-month return reversal occurs after 'peak crowded trade' in 14/22 months in past decade (Table 1).
• 'Let's cyclically rotate': FMS rotation continues on macro; tech, healthcare, large cap longs trimmed, industrials @ highest overweight since Jan'18, flows to small cap & value up; but no regional rotation (US>EU/UK/EM) and banks/energy shunned.
• 'The vaccine's the thing': 41% say credible COVID-19 vaccine most likely trigger for higher bond yields, followed by inflation (37%); investors say vaccine announcement most likely Q1'21; only 11% think 10Y UST yields will break out from 50-100bps range by year-end; and note 4 in 5 investors say flip in US Senate will be risk-off.
• 'Contrarian trades': relative to history (Z-score) and Sept FMS flows UK, energy, banks most contrarian longs (trigger is 10Y UST yield>1%); US tech, healthcare, discretionary most contrarian shorts (trigger is vaccine) - Chart 1. 

Previous in Banking & Investments

Next in Banking & Investments

Home >> Banking & Investments Section

Latest Press Release

Enthusiasts of Unparalleled Heritage and Design Beauty Help Classic Lincoln Town ...

Dubai Health Authority(DHA) Separates Infectious Disease Clinics From Specialize ...

Embellish Your Home Like a Pro

UAE Team Emirates Ready for Binckbank

Empower Successfully Concludes its Summer Campaign 'Set your AC at 24°C Auto and ...

Waterfront Market Celebrates World Vegetarian Day with Blender Bikes Activation ...

Beat the Expected with HONOR 9X Lite

Sahara Centre to Reward Shoppers With Luxury Watches

Philips Raises Awareness Around Sudden Cardiac Arrest for World Heart Day 2020

Premature Coronary Artery Disease Most Commonly Found Among Indians

QD's Bar & Grill Reopens Its Doors

Kuwait Steel Digitally Transforms with SAP to Boost Manufacturing Growth

Dubai Culture: ‘Change' Exhibition Enriches the Components of the Cultural Scene ...

Industry Leaders to Address Recovery of Aviation and Future Sector Growth at Glo ...

Beyond - The New Contemporary Modest-Wear Brand Reshaping the Future for Emirati ...

LG and Hyundai Collaborate to Bring Home Convenience to Electric Vehicles

Win AED 100,000 Worth Room Makeovers with IKEA

DHA Announces Implementation of Diagnosis-Related Group (DRG) for the Health Sec ...

New Italy Visa Application Centre Opens in Dubai

WTTC Launches New Report on the Future of Travel & Tourism in a Post-COVID World