Fund Managers Shifting into Industrials and Value Stocks

Fund managers are rotating but not chasing stocks after the massive rally from March lows, according to the latest reading of Bank of America’s popular fund manager survey.

The survey found that:

1. Cash levels rose by fund managers, to 4.8% of their portfolios in September from 4.6% in August.
2. Investors allocated more cash to industrials, small capitalization stocks and value at the expense of technology, healthcare and large caps.
3. The fund managers did not rotate regions though, still preferring the U.S. over European, U.K. and emerging markets.
4. The fund managers are particularly bearish about the U.K. where new concerns about Brexit are being raised. A net 35% are underweight U.K. equities, the worst showing since March 2018.
5. Banks and energy stocks also are still unloved.

For the first time since February, more investors say the global economy is in an early cycle phase rather than recession.

The survey, conducted between Sept. 3 and 10, was of 224 panelists managing $646 billion in assets.

Reference:

MarketWatch, 2020-09-15, “No longer seeing a recession, fund managers are beginning to shift into industrials and value stocks, Banks of America survey finds”