Over the past week we received the monthly Fund Manager survey suggesting that UK and Europe are now (clearly) underweight relative to benchmark allocations, while also China is essentially un-investable according to the survey.

Interestingly, the survey also reveals that managers are still not net/net long Energy relative to benchmarks, which is an interesting observation given the performance in that sector in recent months.

With energy outperforming indices, higher rates typically follow as well.

Let’s look at positioning, asset class by asset class below.

Chart 1: Energy vs broad equities = paying 1y1y OIS