Tech positioning nears long-run trend top, Deutsche Bank says

Deutsche Bank strategists have noted that the positioning in technology stocks appears to be nearing a long-term peak, with the allocation to this sector pushing prices close to their upper limit. According to the strategists, led by Parag Thatte, technology stocks remain overweight, even though there was a slight decline in mega-cap growth and technology sector positioning last week.

Despite this, the overall equity positioning remains modestly overweight. The Consumer Cyclicals sector, however, has moved to a modestly overweight position, while other sectors are still underweight.

Equity positioning as a whole has declined slightly, though it still maintains a modestly overweight stance. Discretionary investor positioning remains modestly underweight, while systematic strategies positioning has dropped from elevated levels but remains overweight. Volatility control funds within systematic strategies have increased their equity allocations, while commodity trading advisors' equity positioning has fallen significantly but remains elevated.

Inflows to equity funds have eased to $12.4 billion, whereas bond funds have seen inflows surge to a four-month high of $33.8 billion. Money-market funds have received the largest inflows in over 6.5 years, amounting to $166.4 billion. This analysis was produced with the assistance of AI and subsequently reviewed by an editor.