Time to Move to Cash?
Today’s chart shows that in the last couple of months, the managers of multi-asset funds have been lowering their exposure to equities and bonds, preferring to hold cash instead. Are they anticipating a recession?
In our opinion, the macro picture remains reasonable: global growth is around potential, inflation is nowhere to be seen, and central banks are providing support. Therefore, despite threats to global growth, we do not think that the risk of recession is high, rather that the risks from sentiment are tilted to the upside for growth assets as investor defensiveness seems overdone.
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