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Fund managers say the technology trade has never been so crowded. But that has not prevented them from betting too much on the sector.
The Bank of America’s monthly survey of fund managers reveals that 74% say US tech stocks are the “busiest trade.” That’s the highest reading since the question started being asked in December 2013.
Overcrowded or not, they are still overweight in the tech sector, along with the pharmaceutical sector. The Technological Heavy Nasdaq Composite COMP,
He has seen 27 records in this year.
What could relax the technology trade? A coronavirus vaccine, fund administrators say.
Related: Big Tech’s latest calculation is approaching as it continues to accumulate record valuations
The survey also finds that cash levels rose to 4.9% from 4.7%. That precaution appears elsewhere: only 14% say that the economic recovery will be in a “V” shape compared to 44% who expect a recovery in a “U” and 30% in a “W” shape. Additionally, 62% of investors want companies to improve balance sheets, compared to only 27% who want higher capital expenditures, and only 9% call for higher dividends and share buybacks.
The survey also found that the allocation to raw materials is now the highest since July 201.1 and that there was a big jump in exposure to European equities. European leaders will meet this week to discuss the proposal of the European Union bailout fund of 750 billion euros.
Bank of America strategists look forward to a hectic summer, and say buying when the S&P 500 SPX,
It is below 2,950 and sells when it is above 3,250. The S&P 500 ended Monday at 3155.22.
The survey, conducted between July 2 and 9, was 210 participants who managed $ 607 billion in assets.
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