“Fund managers are bailing on emerging markets, commodities and energy-related stocks at a record pace, suggesting that capitulation could be at hand, according to the latest fund-managers survey from Bank of America Merrill Lynch,” MarketWatch reports.
Fears on Greece have been replaced by fears of Chinese recession / EM debt crisis. This has manifested in capitulation in EM equities and energy,
said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch Global Research.
According to MarketWatch:
Capitulation is defined as the moment when everyone who wants to exit a particular asset class is already out, creating bargains. Prices should then bounce off those lows.
The relative positioning of emerging markets to developed markets at -55% is the lowest on record since 2001.
Read more from MarketWatch.