BofA update shows where active managers are putting money
Investing.com - Trend followers have been rapidly accumulating long positions in the S&P 500 and NASDAQ-100 indices, according to a model released by Bank of America (NYSE:BAC) on Monday.
The bank’s analysis shows price trends on both indices are increasingly becoming consensus across short- to longer-term trend followers, with positioning in U.S. equities continuing to build. BofA notes that S&P and NASDAQ positioning still has meaningful room to increase as realized volatility has potential to decline further.
Current stop-loss triggers for these positions are approximately 2% to 2.5% away from present levels, providing a cushion for the accumulated long positions. The Russell 2000 positioning is not as stretched as the larger indices and could experience additional buying pressure in the near term.
Beyond U.S. markets, trend followers are also increasing long positions in international indices, specifically the EURO STOXX 50 and Nikkei 225. This suggests the trend-following strategy is being applied across global equity markets.
The bank’s model indicates Commodity Trading Advisors (CTAs) have elevated equity long positions that can potentially increase further if market volatility continues to decrease, creating additional support for equity prices.
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