(Harvest) Most U.S. risk asset prices have enjoyed a long ride higher amid slow-but-steady economic growth, scant inflation and still ample central bank monetary support. But if fund flows are any indication of where portfolio managers expect markets to go, recent data may be signaling a rotation into less pricey securities.
It makes sense to take some profit on things that may not have much upside left and either put them into others that do, or into far less correlated investments that aim principally to protect capital and provide a little income. More upside is clearly seen in flows to European and emerging market equities thanks to their accelerating economic growth and the still early stages in their current earnings cycles.
