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S&L investors bearish in equities in February

14 March 2014


Developed market bonds gained appeal, according to investment flows across short and leveraged ETPs

Short and leveraged (S&L) exchange traded products (ETPs) reached a record $61bn at the end of February, according to a new report by Boost ETP.

Investors dropped equities and bought into bonds as AuM of S&L ETPs rose 3.7% from January.

Long US debt ETPs had record inflows of $2.9bn while $3.8bn flowed out of long equity ETPs.

Investors were still bullish on Japanese equities. Long Japanese equity ETPs had inflows of $451m while Japanese S&L ETPs are at a record $3.7bn of which 90% is in long leveraged ETPs.

Boost ETP said that Japan stood out as the only geography where S&L investors significantly bullish positions in equities. US equities attracted the highest bearish sentiment with $3.8bn of outflows from leveraged long ETPs.

Bullish positions were also cut across equity ETPs tracking European countries. S&L ETPs tracking France, Italy and Sweden saw flows out of long ETPs and into short positions.

"Bonds in developed markets have regained appeal, helped not least by the turmoil in emerging markets that is driving the repatriation of foreign capital back into US Treasuries. This in turn is reviving bullish leveraged positioning in government debt," said Viktor Nossek, head of research at Boost ETP.


More on Japan: Nomura’s chief economist reveals why he believes the Japanese economy will grow in spite of the imminent rise in consumption tax.


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