But liquidity concerns in defensive positions are less of a concern this time because the rally has lacked conviction all along, says Ankit Gheedia, a strategist at BNP Paribas. Equity funds have been bleeding cash for most of this year despite market gains, with net outflows amounting to about $135 billion so far in 2019, according to Bank of America and EPFR Global.
“Investors have been quite cautious since the start of the year, there is hardly any bull-market equivalent sentiment we observe in the market,” Gheedia said. “Hence the unwind of risk might not drive a liquidity event."
--With assistance from Yakob Peterseil and Sid Verma.
This article was provided by Bloomberg News.