According to a Bloomberg report, Citadel Securities' head of equity and derivatives strategy, Scott Rubner, said the US equity leverage reset has largely run its course. With volatility easing, systematic strategies are finding more room to add equity exposure. The strategist also noted that market breadth is improving and correlations are close to historical lows, while investors show a growing willingness to pay up for upside. In his view, the next genuinely substantive mechanical flow is likely to be re-leveraging rather than continued deleveraging. On the data side, leveraged ETF assets under management contracted to $154 billion in July from $218 billion at the end of June, a decline of $64 billion. Semiconductor leveraged ETFs account for about $31 billion of that total. Elsewhere on Wall Street, Morgan Stanley's prime brokerage team observed a similar trend, saying that after record deleveraging in late July, funds began restoring capital and repurchasing global stocks last week.
Citadel Securities said the reset in US equity leverage is largely complete, clearing the way for systematic strategies to rebuild stock exposure as volatility subsides.
Scott Rubner, the firm's head of equity and derivatives strategy, said market breadth is improving, correlations are near historic lows, and investors are increasingly paying up for upside. The next meaningful mechanical flow may be re-leveraging rather than continued deleveraging, he added.
The firm's data shows leveraged ETF assets under management dropped to $154 billion in July from $218 billion at the end of June, a $64 billion contraction. Semiconductor leveraged ETFs account for about $31 billion of the total.
Morgan Stanley's prime brokerage team said it observed a similar trend. After record deleveraging in late July, funds began restoring capital and buying global equities again last week. Bloomberg reported the comments.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
