Fund managers have aggressively bought into the idea of rotating toward the hardest-hit sectors, according to the latest survey.
The monthly Bank of America fund manager survey shows a net 24% thinking that value stocks will outperform growth stocks, and a net 21% saying that small-caps will outperform large-cap stocks. A net 91% say the economy will be stronger in the next 12 months.
The look at positioning showed a big move into small-cap and emerging markets, and an underweight on cash and staples.
News that two coronavirus vaccines have been effective — as well as a relatively smoothly run U.S. election — have sparked a big switch into energy
and travel stocks. The technology-heavy Nasdaq Composite
is still registering gains — it ended at a record on Monday — but no longer is leading the market.
The Nasdaq has climbed 33% this year, compared with a 12% gain for the S&P 500
The iShares MSCI Emerging Markets ETF
has gained 9%, and the Russell 2000
which also closed at a record on Monday, has gained 7%.
A total of 216 panelists running $573 billion in assets under management participated in the survey, which ended on Nov. 12, which was after drugmaker Pfizer announced its vaccine effectiveness but before biotech Moderna did.