US Outperformance

A recent Bank of America-Merrill Lynch survey shows that a net 16% of fund managers are overweight US equities, while a net 4% are underweight European Equities. In November the same survey showed managers with a net 1% overweight in the US and a 15% overweight in Europe.

Global fund managers were positioned entirely wrong at the beginning of November and I believe that is the case once again. The strong overweight in US equities leaves little room for increasing allocations to the US and is a headwind to continued outperformance of US equities in my opinion.