The composite equity positioning measure shows that fund exposure to US equities has risen since early May and is back at average levels. Macro HF and long-short equity HF positioning is notably above average, while mutual fund positioning is below average, notes Barclays. In particular, US dedicated equity funds increased exposure over the last month from extreme underweight levels, likely helping US equities outperform, adds Barclays. On the other hand global equity funds and Europe dedicated funds significantly cut exposure since April.
Europe positioning is again very underweight amid Greek fears. Europe MF beta is 1.4 std below average compared to neutral around the April peak. Europe dedicated funds have outperformed their benchmarks by 100-200bp on an AUM-weighted basis since April, also indicating that cash levels are fairly high. The positioning measures suggest that global equity funds have also reduced Europe exposure to below average levels, likely exacerbating the last part of the selloff in euro area equities, says Barclays.
