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Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here. |
The NAAIM (National Association of Active Investment Managers) Exposure Index offers insights into the collective thinking of active investment managers, revealing their average position in U.S. equity markets. The 40% green line we've underscored typically marks the lower boundary of exposure for managers reporting to NAAIM. It’s noteworthy these active managers have pared down to a 40% equity exposure, especially doing so even as the market strengthened over the past week.
Unlike the algorithmic approach of systematic flow strategies, active managers are human, factoring in a myriad of concerns from U.S. debt and OPEC dilemmas to UAW strikes, surging mortgage rates, geopolitical tensions in Israel, and the evident deceleration of growth. Over recent months, we've observed the NAAIM closely, noting its prescience relative to systematic flows. Given the current scenario, it's plausible that NAAIM is capturing the prevailing sentiment, signaling a forthcoming downturn in systematic investments.
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Learn more about the Market Situation Report written by Tier 1 Alpha. |
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