Fund Managers Bracing for Financial Crisis – Cash Levels Highest Since 2008 Panic
Urban Carmel
FinancialSense.com
10/14/2015
Summary: Overall, fund managers’ asset allocations in September indicated the strongest bearishness since 2012. Despite a rally since then, bearishness remains pervasive. This is a bullish tailwind for equities, especially in the US.
Fund managers’ cash remains at the highest levels since the panic of 2008-09. This is normally contrarian bullish.
Moreover, allocations to equities remain near the lowest levels in the past 3 years, levels at which prior lows in price have formed.
One concern is that fund managers remain very overweight “risk on” sectors: allocations to discretionary, banks and technology are above their means. Allocations to defensive sectors, like staples, are still low. In other words, there’s a chance fund managers will make a further run to safety in the coming month(s).
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