There has been abnormal changes in fund positioning in recent months, in financials and real estate, consumer, and energy and materials:

  • Financials and Real Estate: With the sector expected to benefit from tax reform and deregulation, Financials have emerged from a 15-month long underweight in 2017 to hit the benchmark (S&P 500) weight, driven by Banks and Capital Markets. Broken out from Financials as its own sector in 2016, Real Estate saw the biggest increase in  exposure across sectors in 2017, with its relative weight rising from .33x a year ago to .40x today — the highest level in our data history since 2009.
  • Consumer: PMs cut back on Discretionary and Staples exposure throughout 2017, with relative weight in Discretionary today at an 18-month low and Staples at its lowest level since 2009.
  • Energy and Materials: These two sectors saw the biggest drop in relative weight last year as managers continued to shun commodity exposure. The relative weight in Energy has dropped from .87x a year ago to .76x (although is neutral on a beta adjusted basis); and Materials dropped from .95x to .86x today, its lowest level since 2009.