By Seeking Delta of http://seekingdelta.wordpress.com
The NAAIM (active money managers) and AAII (individual investors) sentiment surveys were released Wednesday and Thursday respectively. Bullish sentiment in both surveys declined from last week.
This week, active managers have, on average, a 67% allocation to equities. This is down from 76% last week. Bullish sentiment is no longer at “extreme” levels; however it does remain well above average. The median allocation actually increased to 80% from 77.5% last week. This appears to be due to a pull back by the bust bullish managers as the most bullish position declined from 200% to 170%. 25% of active managers have an allocation of 100% or greater to equities with the bottom quartile at a 50% or less equity exposure. The eight week moving average continued its uptrend, now at 57%.
The NAAIM number measures current equity exposure (0% would be all cash, 100% fully invested). Additional detail can be found here.
Individual investors are slightly less bullish than last week. Sentiment, as measured by the AAII survey, declined from 49% last week to 47% this week. Bearish sentiment also declined from last week (27.7% to 26.8% this week) with more investors moving to neutral (23.2% to 26.1%). The eight week moving average increased to 47%.
While neither survey shows “extreme” bullish sentiment both remain above average. For research on subsequent equity returns based on sentiment please see the flowing links. AAII research here and NAAIM research here.
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