Tech stocks, darlings of the pandemic era, were the most shunned in the first few weeks of 2022 as investors see a flurry of rate hikes by major central banks as the main risk to markets, surveys showed on Tuesday. 18).
A BofA survey conducted from January 7th to 13th of investors who have combined assets of more than US$1.2 trillion (R$6.6 trillion) under management showed that fund managers reduced their overweight positions (with above market average) to the lowest levels since December 2008.
A separate monthly survey conducted by Deutsche Bank showed that the overwhelming majority of respondents believe US tech stocks are in bubble territory as investors remained more bearish due to aggressive monetary policy moves and higher yields.
“Better-than-expected inflation remains the predominant driver of these bearish fears, but its counterpart, a more aggressive Fed, drew much more concern from respondents this month,” Deutsche Bank strategists said in a monthly note.
In response to the likelihood of further rate hikes this year, investors have increased their positions in equities — particularly in Europe — in banks, commodities and industrials, cyclical sectors that tend to benefit from higher rates.
The positioning shift was extreme compared to historical averages. Investors increased bullish bets in the banking, commodities and materials sectors, cutting positions in technology, emerging markets and bonds.
Investors have become more bullish on European equities with the prospect of a global trade reopening, and they want to increase their exposure over the next 12 months, according to the BoFA survey.
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