New Vulnerabilities? 83% will increase equity exposure but are committed to own 20% fewer targets
Brendan Wood TopGun Shareholder Confidence Index
For Immediate Release – New York, NY, August 3rd, 2021 (TopGun Press)
Our readers will recall receiving frequent investor polls monitoring the commitment of “actively managed” portfolios (ex index funds) to own equities during the worst months of market interaction with Covid. The big-ticket professional investor commitment to own equities remained steadfast throughout the worst of Covid, including the retail panic. Professional investors varied only on how long the recovery would take. As the Covid recovery matures, the world seems a different place. Covid variants arise, the consequences of massive government spending unfold, and the likelihood, if not inevitability, of rising taxes takes shape. It is time to start closely monitoring shareholder confidence again.
Based on over 2000 discussions with active investors over the last 18 months, investor conviction toward ownership of the 1400 names in the Brendan Wood Index has dropped by about 20%. This means 20% fewer names on the index can expect to attract buyers this quarter and beyond. However, other than certain stocks being unfavoured, the influx of new AUM coming into the market mitigates market effects and general price growth in the same period. Therefore, while conviction may be weakening in many names, the $ volume of overall equity ownership prevails, but more warily. BWI Shareholder Confidence metrics measure not just actual ownership but the intensity of investors’ convictions about equity exposure. Asked directly about their likelihood to increase equity exposure in the next quarter, 83% of portfolio managers say yes. Is this a function of too much money with nowhere else to go?
“Traders are telling us that there is a lull in customary trading flows,” said Jordan Novak, Partner, Brendan Wood International. “This is the ideal time to hook up with BWI’s global panel as investors think through their perceived risks in what looks like a different investment landscape. Portfolio managers are asking us how their global peers are weighing new vulnerabilities. We are going to come up with those answers,” says Mr. Novak.
About Brendan Wood International:
Brendan Wood International (BWI), formed in 1970, is a private partnership generating independent performance audits globally. Brendan Wood debriefs large institutional investors worldwide on a daily basis. There are 2000 investors in the investor panel collectively managing + $40 trillion invested in the 1400 companies on the BWI Index. Relying on real time performance intelligence, the firm advises public companies, institutional and activist investors, investment banks and broker dealers on strategy, performance and recruitment of TopGun talent. The firm’s partners have formally presented at 1000+ C level strategy meetings and corporate off sites in fifty cities. Brendan Wood founded the exclusive TopGun Club, a performance based institution.
Disclaimer:
We wish to emphasize that all reports, evaluations and assessments contained herein, represent Brendan Wood International’s subjective judgment and opinions, based on our years of experience and on information obtained by us in the course of our research. Much of the factual information contained in the reports has been obtained by us from third parties on whose responses we have relied in good faith, independent verification by Brendan Wood International being, under the circumstances, impossible. While we believe that you will find our reports to be an invaluable tool in formulating your own strategies and judgments, the foregoing should be borne in mind. Under no circumstances should any ratings or evaluations of individuals’ performances in these reports be considered as a sufficient basis for making decisions concerning the careers of individuals, including such matters as promotions, compensation arrangements, terminations, etc.
This report is not meant as investment advice and should not be interpreted as advising on the value of a company’s securities, the advisability of investing in, purchasing or selling any company’s securities or any other conclusion relating to investment/divestiture of a company’s securities. Finally, this report is not intended as an offer or solicitation for the purchase or sale of any company’s securities.
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Contacts:
Jordan Novak
Partner
Brendan Wood International
+1 416 924 8110
jnovak@brendanwood.com
Amanda Knott
Managing Director
Brendan Wood International
+1 416 924 8110
aknott@brendanwood.com
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