Saturday, November 27

Managers are betting on risk via equity overweight

The Investors will maintain risk appetite at its highest level since 2013 until the end of the year. This is revealed by the survey of fund managers of Bank of America.

According to the document released by the investment bank, global fund managers end the year with the Largest overweight in US equities since August 2013.

In this way, the interest in having exposure to US equities is maintained despite the increase in inflation (in the United States in October it was 6.2 percent, above estimates) and also despite the supply restrictions.

These two factors have made fund managers increase their allocation to US equities by 13 percent from the prior month to 29 percent.

They expect a moderation in inflation

The fund managers are also more optimistic about inflation. Indeed, 51 percent of those surveyed expect prices to moderate downward.

Managers are precisely “convinced” that inflation is transitory and they hope the Federal Reserve will not take aggressive actionRather, it will remain “far behind the curve.”

In that sense, they expect there to be two rate hikes in 2022.

They have also referred to growth. Managers expect global net growth to be 3 percent.

Emerging and American stocks

According to the survey of managers, it is considered that the Emerging Market and US Equities Will Deliver Better Returns Next Year.

The report recalls that in October, American stocks were trading near an all-time high. Precisely, the strong earnings season coupled with a good corporate outlook has fueled optimism that companies can overcome rising costs and supply constraints.

In addition, fund managers cut their cash holdings from 4.7 percent to 4.4 percent in October, when investors bought stocks taking advantage of the corrections.

Among the highlights, the busiest trades in the November survey were long positions in technology, in bitcoin, ESG and oil. Instead, they went short on Treasuries, China and emerging markets.

About bitcoin

The manager survey has also asked about bitcoin. The price of the most traded cryptocurrency in the world is trading above $ 60,000, but according to forecasts it could be in a range between $ 50,000 and $ 75,000 in the coming months.

Nonetheless, Bitcoin is a bubble, according to 59 percent of investors surveyed.

Opinion on Europe

For Europe, the allocation to euro zone equities decreased 1 percentage point from October to a net overweight of 33 percent.

Instead, the allocation to emerging markets equities increased 3 percentage points to a net underweight of 2 percent, while the exposure

UK equities fell 3 percentage points to a 15 percent underweight, the most since since January 2021.

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