Hedge Funds Reduce Nikkei Longs

In this week’s report, we see S&P500 inflows from hedge funds and outflows for asset managers. On positioning, asset managers increased NASDAQ 100 longs, whilst hedge funds decreased their shorts. Outside the US, hedge funds reduced longs in the Nikkei whilst asset managers reduced longs in MSCI EAFE.

On the details:

• Flows: we saw $0.4bn of inflows to US equity ETFs (Chart 1). UST, IG, Muni, and MBS ETFs experienced inflows WoW (Chart 2).
• Real money positioning: over the past week S&P500 longs decreased and NASDAQ longs increased (Charts 3 and 4). On a 5y percentile basis, asset managers are relatively long S&P500 and NASDAQ, with S&P500 reduced WoW (Chart 5). Elsewhere, Nikkei longs increased whilst MSCI EAFE and MSCI EM longs decreased (Chart 6).
• Hedge fund positioning: over the past week, hedge funds decreased shorts in S&P500 but extended in NASDAQ (Charts 3 and 4). Relative to past positioning, hedge funds are bearish S&P500 (Chart 5). Outside the US, longs decreased in the Nikkei, extended in MSCI EAFE, and shorts were reduced in MSCI EM (Chart 6)
• Sentiment: the put-call ratio has increased on last week. Survey-based short-term investor optimism (AAII) decreased but remains in a net bullish territory (Charts 7 and 8).

ETF Flows (Charts 1 and 2)

US Positioning (Charts 3 and 4)

Global Positioning (Charts 5 and 6)

Sentiment (Charts 7 and 8)

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)