uploads///stock exchange _

November BAML Survey: How Fund Managers Are Playing the Markets

By

Nov. 14 2018, Updated 3:45 p.m. ET

BAML survey and fund managers

BAML (Bank of America Merrill Lynch) conducted a survey that polled 225 global investors with $641 billion in total assets under management between November 2 and November 8.

Article continues below advertisement

Allocation to US stocks surge

The equity allocations to US stocks increased by 10% to a net 14% overweight in November. The US once again emerged as the most favorable region for investors. The earnings momentum for US companies is still going strong. Moreover, on average, investors expect the S&P 500 (SPY) to rise another ~12% before peaking. The performance divergence between the US and the rest of the world continues. The MSCI Emerging Markets Index is trading with a YTD loss of 17.0%, while the S&P 500 (SPY), the Dow Jones Industrial Average (DIA), and the NASDAQ Composite (QQQ) have risen 4.1%, 5.1%, and 10.1% YTD as of November 9, respectively.

Emerging market equities attract interest

In November, fund managers lapped up emerging market equities (EEM) in addition to US equities. The sell-off in emerging markets might have tempted investors to go bargain hunting in equities from these regions. Fund managers increased their positions by 8% to 13% overweight in emerging market equities.

Many market veterans including Mark Mobius are also suggesting investors buy emerging market stocks. While emerging market stocks sold off due to the rising US dollar (UUP), rising US interest rates (TLT), escalating trade tensions, and rising oil prices, they seemed to have stabilized lately. Some countries including Brazil (EWZ) and India (INDA) have even seen a rebound. Moreover, the fall in emerging market equities led to attractive valuations, which has encouraged investors.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.