Investors have turned their attention towards public markets as asset managers become “cautiously bullish”, according to this year’s Q3 report from Bfinance.
Public markets have seen a rise in attention as searches for equities increased by 7% over the quarter. On the flipside, searches for private market assets accounted for 48% of all searches, a decrease from 53% in the second quarter, and more than ten percentage points down from the previous 12-month period when it hit 61%.
“Asset managers are positioning themselves more aggressively as the Bfinance manager positioning barometer confidently moves into bullish territory, despite the risk appetite barometer retreating in the quarter,” the report said.
Global and developed markets saw positive response for the year, with developed markets making up 21% of searches in the last 12 months, up from 14% previously. Global equity searches hit 48% in the 12 months to the end of September, still a decrease from last year’s 64%.
“Global markets have been adjusting to the reality of persistent inflation and sticky interest rates – a theme many hoped would be short lived but has instead exerted pressure on equities and their valuations,” the report explains.
Global equities slowed in the second part of the 12 months, due to an uptick in oil prices and geopolitical pressures. Global developed markets hit a sweet spot with returns from the “Magnificent Seven”, which the report called a “severe headwind” for active managers.
Hedge funds also saw a positive push in the market and made up 45% of new diversifying strategies manager searches in the past year. This is an uptick from the previous cycle, where they represented 36%.
“Clients include those adding to existing hedge fund portfolios as well as those returning to the space amid better prospects for diversifying returns,” the report said. “Strategy interest has remained focused on the most diversifying areas (low net equity strategies and managed futures) to the exclusion of net long approaches.”
