Canopy Investor Meta Data Analysis

Investors are bullish US equities going into 2021

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Singapore, Jan 4 2021

Happy New Year and welcome to Canopy’s Investor Behaviour Newsletter (Week 1 of 2021). I hope you managed to switch off and spend some time with your loved ones during the break.

Investors ended 2020 on a really bullish note for equities. The chart above shows cumulative buy and sell volumes by the 3 major asset classes for the entire year. As you can see from the chart the fixed income ‘wild swing’ had subsided by October and the last 2 months have been all about equity buying.

The next chart (below) drills deeper into the equity flows. Here we see the cumulative buy/sell volume of major equity sub-asset classes (the ones where the flows were not significant have been eliminated for sake of clarity). From this chart we see that

  • There was ‘Buy US and Sell China’ theme for most of 2020.
  • US equity buying sharply increased after the elections
  • This new buying has been focused more on Funds and ETFs rather than specific equities (implying the investors do not have a strong sector / individual equity specific view)
  • The selling of Chinese equities also stopped after the elections and we actually saw some net buying. However the volumes remain small in the big scheme of things
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Conclusion

It is very clear that the current sentiment is very bullish. Whether this means that it is time to increase allocation to equities, or that the market is already over bought, remains to be seen and I suppose we will find out in the next few months.

Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.

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Tanmai is the CEO and Founder of Canopy, which is an investment reporting and analytics company. Here he analyses investment trends seen in Canopy's meta-data

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