Bank of America: Funds massively reduce semiconductor holdings, shifting into energy

Golden Finance reported that on July 20, Bank of America released a report saying that as the semiconductor sector has rebounded significantly this year, funds are rebalancing their portfolios through profit-taking, leading to large-scale outflows from the semiconductor and software sectors. Meanwhile, to reduce over-reliance on AI themes, capital is shifting toward traditional cyclical sectors such as energy and materials.
Global active funds sharply cut holdings of semiconductor and software sectors: Since the beginning of this year, to rebalance positions after a strong rally in the semiconductor sector, global active long-term funds have sold semiconductor stocks worth $77.4 billion. Meanwhile, due to a weakening earnings momentum, funds have also sold software stocks worth $58.1 billion.
Capital flows into energy and materials to diversify AI theme risk: As a hedge against excessive concentration in AI themes, funds this year bought energy stocks worth $36.8 billion and materials stocks worth $25.8 billion. Only in June, global funds net bought $13.2 billion in energy and $4.1 billion in materials, while selling $11.9 billion in tech hardware and $8.1 billion in diversified financials.
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