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Investing.com – In a recent report, Bank of America revealed the top 10 stocks held by financial institutions around the world, highlighting their strength in investment portfolios.
The list is headed by Taiwan Semiconductor Manufacturing Company (TSMC), which holds 95% of the funds involved. Microsoft (NASDAQ:) and The hand Holdings ADR (NASDAQ:) shares second place, with 88% of funds holding these products.
Samsung Electronics (KS: ) follows with 83%, while India’s HDFC Bank Limited (NYSE: ) and China’s Tencent Holdings Ltd (HK: ) each appear in 79% of the portfolio.
Rounding out the list are Amazon (NASDAQ:), NVIDIA (NASDAQ:), and ASML (AS:), each holding 77% of the funds, and Japan’s. Keyence (TYO:) with a 76% holding rate.
This list shows that the technology sector continues to dominate global investment.
By 2024, long-term funds alone significantly increased financial exposure, adding $40 billion in terms of exposure. However, fund managers faced more challenges, as overweight positions underperformed in most regions except the US, where overweights outperformed by a little over 0.2%. .
By sector, US industrials saw the largest increase in active equity, BofA data, citing its analysis of just 8,400 long-term funds.
US funds also increased exposure “but struggled to increase active exposure to the largest Tech stocks due to the heavy weighting of these stocks,” the bank’s strategists led by Nigel Tupper said in a letter.
Conversely, in Asia and Emerging Markets, funds have reduced their active exposure to Financials while increasing their allocations to Tech.
Looking ahead to 2025, BofA’s Triple Momentum analysis shows a positive outlook for Financials and Tech, suggesting that these sectors may present strong opportunities for active exposure.
In a separate January Fund Manager (FMS) survey, BofA highlighted investors’ strong sentiment towards US dollars and currencies, while showing weak sentiment towards other asset classes.
The survey shows that shares fell 3.9%, their lowest level since June 2021. This decline led to a second consecutive “sell” signal under BofA’s Cash Rule, which is a historical trend associated with weak equity performance in subsequent months.
A peak of 41% of fund managers reported being overweight, although this represented a decline from the three-year peak of 49% reported in December.
BofA points to “large January equity flows from US stocks to Europe,” as US equities fell sharply from a 36% overweight to 19%. At the same time, Eurozone stocks went from 22% overweight to 1% overweight, representing the largest monthly increase in Eurozone exposure in 25 years.
The survey also reveals bearish sentiment across other asset classes. Assets are underperforming 6% of managers, while 11% are subprime, and 20% are subprime bonds.
