Equity positioning remains above average, with US stocks in lead: Deutsche Bank

Investing.com -- The wave of bullish bets on the market has eased from the elevated levels last week, but remains above average, with U.S. equities continuing to hold top spot on the list of fashionable investing, analysts from Deutsche Bank (ETR:DBKGn ) said in a recent note.

"Our measure of aggregate equity positioning eased off last week's elevated levels but remains above average (z score 0.67, 85th percentile)," analysts from Deutsche Bank said in a recent note. 

Inflows to equity funds continued, albeit at a slower pace, with $14.4 billion coming in after two blockbuster weeks of $36 billion and $53 billion. 

But the U.S. market remained a favorite, attracting $16.4 billion in inflows. That far outpaces the inflows of $4 billion seen in funds with global mandate.

The decline in positioning this week was driven by discretionary investors, while systematic strategy positioning remained largely unchanged.

On the sector front, tech funds saw a significant rebound, with $5.5 billion in inflows, recovering all the outflows "they had suffered in the last five weeks," the analysts added. 

Cyclical stocks, meanwhile, continued to attract inflows, with financials doing most of the heavy lifting, attracting about $1.1 billion inflows propelling positioning in the sector to elevated levels. That is contrast to the most other cyclical sectors, in which positioning is close to average.

Positioning in health care stocks is the lowest across sectors, but could be shaping for a rebound if history repeats itself. 

"Over the last 2 years, sectors at the bottom of the pile have staged rebounds which took them to the top, notably MCG & Tech in early 2023, and Utilities in the middle of this year," the analysts added.

Source: Investing.com