Singapore, Nov 17th 2020
Welcome to Canopy’s investor behavior newsletter, where we analyze trends as seen in our investment reporting activity.
After sharp selloffs in both equities and fixed income markets during the year, risk asset allocations have been slowly increasing and are now back to pretty much what they were at the beginning of 2020. Cash allocation which had increased to almost 20% during Mar-Apr is now back to a more standard 13%
Investor’s knee jerk reaction to the US elections has been to buy equities and reduce fixed income allocation (cash allocation has not changed much). However this increase in equity allocation has NOT gone to the US equities market.
But the Buying has been in Asia Ex-China equities
Investors had increased US equity allocations during Sep-Oct when there was serious talk of another large stimulus into the US economy. However this increase was largely pared before the elections and has not changed much since.
The main beneficiary of the increased post US election equity allocation has been Asia ex China equities. All other sectors have remained more or less constant. EMEA allocation has steadily declined since March this year.
We are not seeing any sharp increases in China equity allocations, even though Trump is on his way out. This would imply that the market does not expect any major changes in US-China relations in the short term.
Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.