Rosenberg: Equity Managers Have Gone "All-In" To Levels Not Seen Since Before The Crisis

In his latest note, Gluskin-Sheff’s David Rosenberg highlights interesting behaviour on the part of equity managers:

The VIX is at 17; the TED spread at 8bps; CDS has tightened in to six-week lows;
the Nasdaq and small cap indices have broken out to new recovery highs; oil is
back above $82/bbl … and, as charts below from the ICI illustrates, portfolio
managers have been so nervous to miss any up-moves that they have run down
their cash holdings to 3.6% of assets from nearly 6% a year ago — the largest
decline in 19 years.  Equity cash ratios are back to where they were in
September 2007, just as the stock market was hitting its peak.  By way of
comparison, bond fund managers have 6.4% cash ratios and hybrids are at
7.3%.  Corporate bond fund managers are sitting on 6.9% cash, the high end of
the range for the past two decades.   


Photo: Gluskin-Sheff


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