This trend continued in November, the latest data from EIE’s Fund Manager Sentiment Database show. trueUS equities score 69 points, indicating a large majority of asset managers expects the US stock market to generate returns in excess of 5% over the next 12 months. The score is even higher than the all-time record registered in the previous month. US small cap equity sentiment also surged to its highest score ever, as the asset class generated a record return of 7.99% in November.
European equity sentiment rebounded to levels seen before the market slump. Fund managers have a little bit more confidence in emerging market equities after the MSCI Emerging Markets Index returned some 2.5% last month, but it remains relatively low at just 19 points.
October’s fund flows point in the same direction, with US equities recording strong net inflows while European and EM equities are hit by a strike of outflows. Fund selectors though, have different views than fund managers about where to increase their allocation to.