Societe Generale’s survey of investors showed that 60.7% of those polled were bullish on global emerging markets over a 2-week period, compared with a staggering 84.4% in a previous survey in September.
About 77.4% of investors in the October survey were bullish on emerging markets when looking at a 3-month view, “considerably more than for the 2-week view and a higher bullish signal than the one registered in September,” the survey showed.
A bearish view for the near term was taken by 26.2% of investors, significantly higher than 8.9% last month.
The survey was conducted among 84 of Societe Generale’s clients in Asia, Europe and the US in October; 42 were real money investors – institutional investors such as pension funds – and 42 were hedge funds.
In terms of their conviction level – how strong their bullish or bearish views were – real-money investors were “slightly more bullish” than hedge funds, the results showed.
Positioning has shifted markedly towards a more neutral risk-taking stance compared with last month, with hedge funds positioning less aggressively on the bullish side than real-money investors. But compared with sentiment, “there are still considerably more investors that feel that they are under-invested, meaning that their risk-position should be raised if they were to be aligned with their sentiment, rather than the opposite,” Societe Generale wrote.
35.7% of total investors feel that they are under-invested compared with 21.4% over-invested.
Among real-money investors, 47.6% are perceived as under-invested versus 9.5% over-invested while the picture is reversed for hedge funds: 23.8% feel they are under-invested compared with 33.3% over-invested.