- “The continued high level of optimism is a concern and markets may be vulnerable to bad news, but valuation support suggests any correction should be short and shallow" says BAML
- Cash balances remain very low at 3.8% (same as January, vs 4.1% in December 2012). This is still lowest since February 2011. Typical range is 3.5-5%.
- Equity allocations - a net 51% are overweight global equities, same as January (and the highest since February 2011). It was 35% in December 2012.
- $EEM remains the most favored region (overweight 43% vs 40% in January)
- Followed by Europe (overweight 8% vs 15% in January) and
- US (underweight 3% in January)
- Overweight Japan by 7% vs 3% in January and underweight 20% in December.
- A net 6% globally are overweight banks, the highest since February 2007 (vs overweight 3% in January and net 25% underweight a year ago). In the US, investors are the most overweight banks (25%) in the history of the survey ($XLF)
- Holdings in defensive pharmaceutical (the top choice) and consumer-staples companies increased
- Energy and materials reduced.
- Technology companies cut to the lowest level since 2009.
- Utilities and telecoms (defensives) allocations at their lowest since 2004.
- 82% of fund mgrs say bonds are overvalued. Net 47% are underweight (53% in January, which was the lowest weighting since May 2011) ($TLT)
- Net 39% - highest level in 24 months (vs 29% in January) - forecast profits worldwide will improve in next 12 months
- 59% expect global economy to strengthen next 12 month, same as January and still the highest optimism since Apr 2010
Tuesday, February 12, 2013
Fund Managers' Current Asset Allocation - February
The latest BAML survey of global fund managers continues to show high levels of risk-on positioning with low levels of cash (3.8%) and the highest global exposure to banks since early 2007.