Positioning Isn’t a Problem - But Margin Debt Is

Positioning positives

1. Not stretched: US Equity TPM sits in the 68th percentile since 2015 and continues to trend higher; in prior instances where positioning rose into year-end, SPX averaged ~+14% in the following year.

2. Not extreme: ETF inflows are well below late-2024 and late-2021 peaks; seasonally, 4Q tends to be strong and 1Q weaker, but the worst outcomes historically coincided with flow extremes, which are absent today.