A major bank is seeing signs that investors’ FAANG favour is starting to get fatigued
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By Cormac Mullen
It seems investors are getting more worried about being bitten by the FAANGs.
Allocations to technology stocks fell to 24 percent overweight, the long-term average, according to the latest Bank of America Merrill Lynch survey of fund managers overseeing US$558 billion of assets. The reading is the lowest “z-score” for the sector, a measure of extreme positioning, in three and-a-half years.
The shift coincided with concern that positions in the FAANG stocks -- Facebook Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and Google’s owner, Alphabet Inc. -- in addition to Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holding Ltd., known as the BAT stocks, are too popular. The report showed 29 percent of fund managers described the trade as the market’s most-crowded, just behind the 32 percent who chose bitcoin.
Technology stocks have been the best-performing in the global market this year. The MSCI World Information Technology Index has risen 39 percent in 2017, nearly double the 20 percent gain in the MSCI World Index. The sector succumbed to a bout of profit taking earlier this month, as investors sought to lock in some of those gains.
In December, global investors favor banks, technology and industrial shares, according to the report, and are avoiding staples, telecoms, and utilities.
Copyright Bloomberg 2017
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Mutual funds growing less fond of FAAMG stocks
Tycoons drop $7.6 billion in a day as FANGs lose their bite
It seems investors are getting more worried about being bitten by the FAANGs.
Allocations to technology stocks fell to 24 percent overweight, the long-term average, according to the latest Bank of America Merrill Lynch survey of fund managers overseeing US$558 billion of assets. The reading is the lowest “z-score” for the sector, a measure of extreme positioning, in three and-a-half years.
The shift coincided with concern that positions in the FAANG stocks -- Facebook Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and Google’s owner, Alphabet Inc. -- in addition to Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holding Ltd., known as the BAT stocks, are too popular. The report showed 29 percent of fund managers described the trade as the market’s most-crowded, just behind the 32 percent who chose bitcoin.
Technology stocks have been the best-performing in the global market this year. The MSCI World Information Technology Index has risen 39 percent in 2017, nearly double the 20 percent gain in the MSCI World Index. The sector succumbed to a bout of profit taking earlier this month, as investors sought to lock in some of those gains.
In December, global investors favor banks, technology and industrial shares, according to the report, and are avoiding staples, telecoms, and utilities.
Copyright Bloomberg 2017
Related stories:
Mutual funds growing less fond of FAAMG stocks
Tycoons drop $7.6 billion in a day as FANGs lose their bite
