Professional money managers spend a lot of time researching market metrics in order to help inform them about what their peers are doing in the market. Such data used to be very expensive and only used by investment banks and hedge funds, but now it is becoming available to retail traders as well.
Fintel.io, a provider of advanced financial research tools for investors, regularly reports on macro fund flows into country-tracking ETFs and equities, for example. They recently published data which they feel helps to show that sentiment around the UK market is improving.
“Fund flow into country-tracking ETFs and changes in short interest provide insights into institutional sentiment in the country’s future outlook,” explains Wilton Risenhoover, founder and CEO of Fintel. “Our Funds Flow Leaderboard – UK, analyses changes to a security’s owners count and allocation in order to pinpoint those that have high levels of institutional accumulation. This helps retail investors identify potential profit opportunities.”
What is institutional accumulation?
Institutional accumulation refers to securities being bought by professional and institutional investors such as hedge funds, mutual funds, and pensions. The buying and selling actions of professional and institutional investors can correlate to the stock’s price rising or falling. Taking note of the level of institutional investment helps investors make profitable decisions.
Here are some examples of what Fintel is seeing:
Institutional Fund Flows into the NYSE:EWU – iShares MSCI United Kingdom ETF shows the following activity over the last quarter: Short Interest is at 3.5m shares which – although elevated – is down 19% from its recent high of 4.37M shares.
The Total Market Put/Call Ratio is 0.53, which means that for every 8.3 put positions (indicating a negative bet), there are about 15.6 call positions (indicating a positive bet). The average allocation that US mutual funds and ETFs have dedicated to EWU has increased 75% in the last quarter, to 0.8451%
The total number of institutions disclosing positions in EWU edged higher by 1.95% in the last quarter to 261. The Fintel Ownership Allocation Score has increased to 84 out of 100, up from 41.66 last month. This indicates a significant turnaround in sentiment by US-domiciled institutional investors. The Ownership Allocation Score (OAS) ranges from 0 to 100, with higher numbers indicating a higher level of accumulation relative to its peers.
You can also drill down into metrics around individual stocks to see how bigger investors in the market are positioning themselves.
Significant changes in flows into the UK’s largest companies:
Royal Dutch Shell’s (LSE:RDSB) total owners declined slightly by 0.59% to 1,522 disclosed funds, but average allocation increased 12.66% to 0.394%. The OAS for RDSB is 68.70, indicating a higher than average accumulation by funds.
HSBC Holdings‘ (LSE:HSBC) average allocation by funds declined 11.94% to 0.2922% and the OAS is 28.55, also indicating a significant decline in institutional interest.
Glencore’s (LSE:GLEN) total number of owners increased by 8.78% in the most recent quarter, to 347, and average allocation climbed 1.87% to 0.57%. The Owner Allocation Score for GLEN is 79.70, indicating a positive sentiment by institutional investors.
Prudential’s (LSE:PRU) total number of disclosed owners remained flat but average allocation declined 15.37% to 0.436%. The OAS is 24.4 indicating negative sentiment by institutional investors.
Two notable travel-related companies with positive outlooks:
Carnival’s (LSE:CCL) average allocation climbed 23.27% and the OAS is 71.96 indicating strong accumulation by funds.
Hostelworld Group’s (LSE:HSW) total disclosed owners increased 8.33% and average allocation climbed 1,430% to 0.0353%. The OAS is 92.14 indicating strong accumulation by funds.
In addition to the Funds Flow leaderboard, data-driven retail investors that subscribe to Fintel.io have access to comprehensive ownership data of US institutions, mutual funds, and ETFs targeting equities and bonds in mature, emerging, and frontier markets.
The platform also provides insight into mutual funds and ETFs that are shorting stocks, and allows users to track activist hedge funds to uncover potential profit.
