Extremely bullish that is. They have increased their U.S. equity exposure to 96.5%. That’s in the 98th percentile of readings since 2006:
Is this high exposure a contrarian indicator? Maybe not. Key bit from Charlie Bilello: Many seem to be interpreting this development as a bearish signal, a contrary sentiment indicator. If active managers have a high exposure to equities, they say, it must be a sign of an impending top.
If we look back at the evidence, is this indeed the case?
As it turns, out, not necessarily. Historically, the forward returns following the highest exposure readings (top decile) are actually above average from 3 months through 12 months.
Very interesting. Link to the article is here: https://pensionpartners.com/when-active-managers-go-all-in/?utm_source=ReviveOldPost&utm_medium=social&utm_campaign=ReviveOldPost