Equity optimism highest since 2018

Bank-of-America/cash/equities/emerging-markets/

19 November 2020
| By Laura Dew |
image
image
expand image

The successful trial of two COVID-19 vaccines plus the election of Joe Biden as US president-elect has led to the “most bullish” fund manager sentiment all year.

According to the latest Bank of America global fund manager survey, cash levels sank to 4.1% from 4.4% which was now below pre-COVID levels while equity optimism was the highest level since January 2018 with equity allocations by respondents rising 19 percentage points.

Equity allocations were at 46% in November and an allocation of 50% was classed as ‘extremely bullish’ by the organisation.

There had been a rotation in exposure to small caps, emerging markets and banks while they reduced exposure to staples, cash, bonds, Europe and healthcare.

They were particularly optimistic on emerging markets which was the asset class named as most likely to be outperform in 2021 followed by the S&P 500. A net 36% of investors said they were overweight emerging markets, up 24% from the previous month.

Respondents expected a credible COVID-19 vaccine to be available in January 2021, up from February in the previous three surveys. However, the risk of a second wave remained the biggest tail risk, rising by seven percentage points from September, followed by the tech bubble.  

Michael Hartnett, chief investment strategist at Bank of America, said: “The most bullish fund manager survey of 2020 on the back of the vaccine, election, macro; November’s fund manager survey shows a big drop in cash, 20-year high in GDP expectations, big jump in equity , small cap and EM exposure; reopening rotation can continue in Q4 but we say ‘sell the vaccine’ in the coming weeks or months as we think we are close to ‘full bull’”.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 4 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 5 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 4 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 3 days ago

TOP PERFORMING FUNDS