Do asset managers believe equity markets will extend their rally?

Analysts at Natixis suggest that on their estimates, discretionary asset managers has trimmed their equity exposure considerably in recent weeks, this holding true for both hedge funds and for long only, with this exposure now at the lower end of the range.

Key Quotes

“These metrics can be interpreted as denoting: (1) a more prudent management stance, as funds have on average performed well and, with the year-end looming, asset managers tend to rein back exposures in order to lock in performances; and (2) greater reservations as regards equity markets and their valuation (30x CAPE for S&P), with respect to which one can observe a reallocation in favour of European and emerging markets; and (3) a combination of both aforementioned effects.”