fbpx

Fund Managers: Pessimism Rising, Banks In Crisis

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Bank of America’s monthly Fund Managers Survey (sometimes simply abbreviated to “FMS”) is an interesting barometer of major institutional players around the world. This month, 251 participants with $666 billion in Assets Under Management (AUM) responded to the survey. The compiled results are fascinating in terms of starkness. The outlook presented therein also align closely with the findings of most past articles published here.

Overall, survey respondents are taking the lowest level of risk in their investment decisions since the Global Financial Crisis (GFC):

The shadow of the GFC looms large even in the bond portfolios held by the respondents. The net percentage of respondents opining that they’re overweight in (or “hold too much of”) bonds are at highs unseen since March 2009, when the GFC was in full swing and equity markets were at deep lows.

Given the rising concerns of commercial real estate being increasingly unviable given high debt as well as vacancy rates, survey respondents reveal that they’re underweight in (or “hold less of”) real estate at a level comparable to that of December 2008 when the subprime mortgage market was collapsing.

The banking crisis rules the roost in terms of top “tail risk” concerns, although this has slightly abated from April. This is likely on account of the depositor rescue program which is now increasingly likely to be applicable on all failing regional banks.

Interestingly, while inflation also sees a slight step down from last month, worsening geopolitics causing an additional strain has seen a slight uptick. When tied with the idea of very low self-reported risk levels being assumed, this would mean that inflation-related measures are generally being locked into place. One such measure: an increasing focus on “Big Tech”.

Big Tech are increasingly being viewed as the equivalent of “Treasury Stocks”, i.e. they represent companies that are far too ubiquitous and central to technology and business to completely vanish or tank in a short period of time. In fact, being bearish on American banks and bullish on “Big Tech” stocks are both some of the most overcrowded positions held by the survey’s respondents.

Also interesting is the retreat from EM (“Emerging Market”) stocks. For decades now, investing into EM stocks simply meant a dominant investment in Chinese equities. This outlook is seeing a net change: expectations of the Chinese economy maintaining growth is now being deemed unlikely, despite a brief bump due to post-COVID reopening news.

Also persistent (and rising) is the net belief that the recession is inevitable, regardless of the fact that the U.S. Federal Reserve and Treasury are holding off on calling it.

Overall, growth expectations are treading lows not seen since the GFC:

With data reminiscent of the GFC presenting itself in such stark contrast, along with the added pressure of geopolitical risks on the global supply chains – particularly in the Western Hemisphere – it would serve to be cautious with fuzzy growth narratives that run counter to the data.

For investors looking for tactical trading opportunities, there are a number of Exchange-Traded Products (ETPs) that could be considered. For instance, when it comes to the S&P 500, there are ETPs on both the upside as well as the downside. Similar opportunities are available in the upside and the downside of the Chinese market. For banking services, there are products catering to the upside and the downside as well.

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Post correlati

Violeta-540x540-1.jpg
Violeta Todorova
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Violeta-540x540-1.jpg
Boyan Girginov
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Supply, demand disequilibrium and lower US rates could squeeze the non-precious metal
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Violeta-540x540-1.jpg
Sandeep Rao
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Q2 is poised for European stocks’ turnaround and rising interest in energy stocks
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Violeta-540x540-1.jpg
Violeta Todorova
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
Escalation of the conflict in the Middle East threatens to derail the economic recovery.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
Violeta-540x540-1.jpg
Boyan Girginov
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
What is an ETF? How does an ETF work? Key characteristics of ETFs.
Violeta-540x540-1.jpg
Pawel Uchman
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.
Violeta-540x540-1.jpg
Sandeep Rao
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.
A quick primer on leveraged instruments available in markets today.

Violeta Todorova

Senior Research

Violeta se unió a Leverage Shares en septiembre de 2022. Ella gestiona la realización de análisis técnicos, investigación macroeconómica y de acciones, y ofrece información valiosa que ayuda a la definición de estrategias de inversión para los clientes.

Antes de unirse a LS, Violeta trabajó en varias empresas de inversión de alto perfil en Australia, como Tollhurst y Morgans Financial, donde pasó los últimos 12 años de su carrera.

Violeta es una técnica de mercado certificada de la Asociación Australiana de Analistas Técnicos y tiene un Diploma de Postgrado en Finanzas e Inversiones Aplicadas de Kaplan Professional (FINSIA), Australia, donde fue profesora durante varios años.

Julian Manoilov

Marketing Lead
Julián se unió a Leverage Shares en 2018 como parte de la principal expansión de la compañía en Europa del Este. Él es responsable de diseñar estrategias de marketing y promover el conocimiento de la marca.

Oktay Kavrak

Head of Communications and Strategy

Oktay se incorporó en Laverage Shares a fines de 2019. Él es responsable de impulsar el crecimiento del negocio al mantener relaciones clave y desarrollar la actividad de ventas en los mercados de habla inglesa.

Él vino de UniCredit, donde fue gerente de relaciones corporativas para empresas multinacionales. Su experiencia previa es en finanzas corporativas y administración de fondos en empresas como IBM Bulgaria y DeGiro / FundShare.

Oktay tiene una licenciatura en Finanzas y Contabilidad y un certificado de posgrado en formación empresarial de Babson College. También es titular de una certificado CFA (Chartered Financial Analyst).

Sandeep Rao

Investigación

Sandeep se unió a Leverage Shares en septiembre de 2020. Está a cargo de la investigación de líneas de productos existentes y nuevas, clases de activos y estrategias, con un enfoque particular en el análisis de eventos y desarrollos recientes.

Sandeep tiene una larga experiencia en los mercados financieros. Comenzó en un hedge fund con sede en Chicago como ingeniero financiero, su carrera abarcó varios dominios y organizaciones durante un período de 8 años, desde la División de Prime Services de Barclays Capital hasta (más recientemente) el Equipo Index Research de Nasdaq.

Sandeep tiene una maestría en Finanzas, así como un MBA del Illinois Institute of Technology de Chicago.

Gold Retreats But Rally is Not Over

Copper Ready to Explode

Q2 2024 Market Outlook: Rocky Road Ahead

What is an ETF? (Exchange Traded Fund)

How Do Leverage Shares ETPs Trade in Multiple Currencies

Currency Impact

Build your own ETP Basket
Leverage Shares: Europe’s top leveraged and inverse ETP provider.
Main ETP benefits
Common investor questions

Get the Newsletter

Never miss out on important announcements. Get premium content ahead of the crowd. Enjoy exclusive insights via the newsletter only.