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Investors return to risk, says Markit
02 April 2014
US benefits from reassessment of exposures
After a tenuous start to the year, investors have a renewed
appetite for risk having returned to the trades favoured during
the bull run of 2013, explains Markit research analyst Simon
The last four weeks have seen US investors regain their
appetite for their domestic market. The 388 US listed
domestically exposed funds saw over $15.8bn of inflows in
March, enabling these funds to more than recoup the $14bn of
outflows experienced in the first couple of months of the year.
Total AuM has reached an all-time high of $930bn.
"Driving these inflows was a return to the broad based index
investments that were last year's favourite play," said Colvin.
"Size and style funds (which include tracker funds) made up the
bulk of inflows accounting for $12.5bn of the March total,
recouping some of the $22.4bn of funds lost during the first
two months of the year."
Sector-focused funds continued to attract new assets with
$2.66bn of inflows, the seventh month in a row that sector
exposed funds saw net inflows.
"Short sellers are also showing signs of returning to last
year's risk on mode with the average short interest in the
S&P 500 falling by nearly 3% to 2.2% after from the recent
highs seen during the first week of March," added Colvin.
"Driving this fall in demand to borrow are consumer
discretionary constituents which have seen their average demand
to borrow fall by 4% to 2.86% of shares outstanding."