From BoA-ML Global Fund Manager Survey:

“The summer bond crash has also induced a 7-year low in allocations to consumer
staples and soaring allocations to industrials (10-year high), Eurozone (6-year
high) & UK equities (11-year high). EM/resources/commodities short positions
remain intact, despite a big September jump in China growth expectations

I’ve seen countless examples when inflection point of a given position occurred and an event triggered the participants to cover their net exposures. Maybe that’s what might will happen in commodities given the growth expectations remain strong.

“A net 18% of global investors are UW EM – among the lowest exposures since Nov’01.”

Maybe sometimes my posts say I’m much of an advocate of contrarian positions. However markets often go where they can cause the most pain and with above average cash holdings + such grudge against EM no question where it could hurt the most.


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