Are large cap stocks losing popularity?
The number of large-cap US long-only funds has decreased by ~40% in 10 years, to its lowest level in decades. Since 2013, the number of large cap funds has declined from ~570 to ~340, according to Bank of America. In addition, active mutual funds have been consistently underperforming the market. More than 90% of actively-managed equity funds underperformed their benchmark in over the last 20 years. In 2023 alone, 60% of all active large-cap US equity funds underperformed the S&P 500. Source: Bank of America, The Kobeissi Letter
Are investors too complacent?
May Fund Manager Survey (FMS) sentiment is at the most bullish level since Nov’21, BofA says. The average cash level of FMS investors fell to 4.0% of AUM from 4.2%, the lowest level since Jun’21. Source: BofA, HolgerZ
The US consumer (risk) in one chart: credit card debt at record high, personal savings rate record low
Source: www.zerohedge.com
Sell in May and Go Away?
It hasn't worked in the last decade, and it isn't working this year either, with the S&P 500 already up more than 3% this month! Source: Barchart, Bloomberg
As highlighted by Lyn Alden ->
"People often report the nominal amount of cash that Berkshire $BRK.B has, as though Buffett is hoarding cash. You can't just look at the nominal cash level. All of Berkshire's numbers go up. An insurer needs a lot of liquidity. His cash as a % of his assets is in a normal range".
What is a credit default swap? (CDS)
Source: Boring_Business @BoringBiz_
US Households have now run out of excess savings.
Current levels are worse than even 2019. The hard part is that this is happening just as the labor market has started to weaken. Source: Game of Trades
“I don’t mind at all under current conditions building the cash position."
"When I look at what’s available in equity markets and the composition of what’s going on in the world, we find it quite attractive." - Warren Buffett
