U.S. equity leverage reset has largely run its course, and the next meaningful mechanical flow may be renewed leverage rather than further deleveraging, Citadel Securities stock and derivatives strategy head Scott Rubner said. He said lower volatility is widening the scope for systematic strategies (rules-based funds) to rebuild stock exposure, while market breadth is improving, correlations are near historical lows and investors are increasingly willing to pay a premium for upside. Citadel Securities data showed assets under management in leveraged ETFs (funds that use debt or derivatives to amplify returns) fell from $218 billion at the end of June to $154 billion in July, including about $31 billion in semiconductor leveraged ETFs. Other Wall Street firms are seeing similar patterns. Morgan Stanley's Prime Brokerage team said funds began restoring capital and buying global equities again last week after record deleveraging at the end of July, Bloomberg reported.