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Investing.com — In a latest report, Financial institution of America revealed the highest 10 shares most generally held by funds globally, highlighting their dominance in funding portfolios.
The checklist is led by Taiwan Semiconductor Manufacturing Firm (TSMC), held by 95% of the related funds. Microsoft (NASDAQ:MSFT) and Arm Holdings ADR (NASDAQ:ARM) share the second spot, with 88% of funds holding these shares.
Samsung Electronics (KS:005930) follows with 83%, whereas India’s HDFC Financial institution Restricted (NYSE:HDB) and China’s Tencent Holdings Ltd (HK:0700) every seem in 79% of portfolios.
Rounding out the checklist are Amazon (NASDAQ:AMZN), NVIDIA (NASDAQ:NVDA), and ASML (AS:ASML), every held by 77% of funds, and Japan’s Keyence (TYO:6861) with a 76% holding price.
The checklist demonstrates that the know-how sector continues to dominate world funding portfolios.
In 2024, long-only funds considerably elevated lively publicity to equities, including $40 billion relative to benchmarks. Nevertheless, fund managers confronted headwinds, as chubby positions underperformed underweights in most areas besides the US, the place overweights outperformed marginally by 0.2%.
Sector-wise, US Industrials noticed the largest improve in lively fairness publicity, BofA notes, citing its evaluation of 8,400 long-only funds.
US funds additionally added publicity to Financials “however struggled to extend lively publicity to the most important Tech shares given the substantial index weights of those shares,” the financial institution’s strategists led by Nigel Tupper mentioned within the observe.
Conversely, in Asia and Rising Markets, funds diminished their lively publicity to Financials whereas elevating their allocations to Tech.
Wanting forward into 2025, BofA’s Triple Momentum evaluation signifies a good outlook for each Financials and Tech, suggesting these sectors might current compelling alternatives for elevated lively publicity.
In a separate January Fund Supervisor Survey (FMS), BofA highlighted robust investor sentiment towards the US greenback and equities, whereas signaling bearish views on most different asset lessons.
The survey signifies that money allocations have fallen to three.9%, their lowest level since June 2021. This discount triggered a second consecutive “promote” sign underneath BofA’s Money Rule, a sample traditionally linked to weaker fairness efficiency within the months that comply with.
A internet 41% of fund managers report being chubby equities, although this represents a decline from the three-year peak of 49% recorded in December.
BofA factors to a “massive January fairness rotation from US shares to Europe,” as publicity to US equities dropped sharply from a internet 36% chubby to 19%. On the identical time, Eurozone shares shifted from a internet 22% underweight to a 1% chubby, representing the most important month-to-month improve in Eurozone publicity in 25 years.
The survey additionally reveals bearish sentiment throughout different asset lessons. Commodities are underweighted by 6% of managers, whereas 11% are underweight money, and 20% are underweight bonds.
