A few months ago, most investors feared having too much exposure to equities. Now many are worried they may not have enough.
The 15% year-to-date rally in the S&P 500 is pulling once doubtful investors back into the market. Many who had whittled down stock holdings during 2022’s painful decline are shifting gears.
The National Association of Active Investment Managers’ exposure index last week hit its highest level since late 2021, while cash levels among global fund managers surveyed this month by Bank of America fell to their lowest point since January 2022.
Positioning among discretionary investors, a cohort that includes fund managers to individual investors, moved above neutral earlier this month for the first time since February, Deutsche Bank data showed.
Meanwhile, options investors are buying calls – bets on upside in stocks – at levels not seen in years. A record 1.8 million S&P 500 calls traded on Thursday, helping lift the one-month moving average of calls-to-puts to the highest in at least four years, Trade Alert data showed.
“If you’ve been fighting this market, you’re very likely exhausted,” said Emily Roland, co-chief investment strategist at John Hancock Asset Management, who has been increasing overall equity allocations.