BackLow cash with funds signals fall in markets
Low cash with funds signals fall in markets
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Other indicators, too, are flashing red. The survey’s risk appetite index is back to its January level of 46, up from 42 in February and 44 in March. A net 52% of asset allocators are now overweight equities, the same level in January and compared with 33% in February and 46% in March. Investors are now 4% underweight on cash, compared with 8% underweight in January.
A record 71% of investors believe that, globally, corporate earnings will rise by at least 10% this year, well above the 63% who believed that in January. But low cash levels indicate the rally is running out of steam.
There is though a big difference between January and April. In January, a net 47% of investors were overweight emerging markets; that has come down to 31%. The survey says positions now look less stretched than at the end of 2009. So a correction in global equities may not be felt that deeply in emerging markets.
Investors have also increased their exposure to commodities, with a net 20% now overweight on commodities, compared with 16% in March. In January, a net 23% was overweight on commodities.
What about India? The outlook is mixed, with emerging market investors being heavily underweight India, but Asia-Pacific investors overweight the country.
Write to us at marktomarket@livemint.com
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