In the past week, these strategies dumped about $24 billion, pushing total net sales since March to roughly $108 billion, with assets in such strategies around $1 trillion or slightly more.

If volatility holds steady or eases by late April, Nomura estimates these systematic strategies could become net buyers of roughly $20 billion by early May; however, a material rise in volatility could trigger about $48 billion in equity sales by the end of April.

Although the dollar value of these sales is small relative to the S&P 500, the distinctive trading patterns and timing of these funds keep them a critical focus for market participants.

Equity exposure in these strategies is now at one of its lowest points in years, with only around 20% of past observations showing lower levels.

One-month realized volatility remains elevated near 21%, staying above the 20-year median and signaling ongoing market risk despite a recent pullback in selling.

Volatility-linked funds, led by volatility control funds and CTAs, have largely completed the heaviest round of selling in the last month, potentially opening the door for gains if volatility stays subdued.

Analysts, including Nomura’s Joanna Wang, view the overall outlook as neutral rather than bullish, but acknowledge meaningful selling capacity remains if volatility rises.