16th October 2015

Investor positioning poll for Q4, 2015: Results

Our latest anonymous poll asked investors how they were positioned for Q4. Given the weakness in August and September in all risk markets, we are surprised to find that 41% were overweight portfolio beta with 29% neutral and 29% underweight. The poll was conducted in the first week oInvestor Poll Results Credit Market Dailyf October and into the current rally, so maybe that was an influence.

Investor cash positions are high, the primary market has delivered less than Eur6bn of non-financial IG corporate bond issuance (against a 5-year average of Eur15bn, Dealogic data) and secondary market liquidity is offering no assistance. Into that triumvirate, any lifts has seen spreads move disproportionately tighter.

Sentiment has been boosted by the ongoing weak macro because it means quite likely the Fed will not be raising rates later this month. Loose policy for longer keeps risk assets better bid. October has shown a good recovery (iBoxx IG index -9bp) and it seems that most expect the rally will continue through the rest of the month and quite possibly the quarter.

According to our poll results, investors are positioned for a rally.

 

Suki Mann

A 25-year veteran of the European corporate bond markets and in his role as Credit Strategist, Dr Mann has been ranked number one in the Euromoney Investor Survey eight times in ten years. Previously with Societe Generale and UBS, he now shares views of events in the corporate bond market exclusively here on Credit Market Daily.