Bank of America: Industrial sector becomes the new favorite in the market, global stock market funds flow into industrial ETFs exceeding $30 billion USD

Zhitong
2024.08.20 23:47
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Research from Bank of America shows that in July, the industrial sector became a new favorite among investors in the global stock market, attracting billions of dollars in capital inflows. Bullish funds increased their investments in industrial stocks to 7.8 billion USD in the European market and to 30.3 billion USD in the U.S. market. Bank of America's quantitative strategist pointed out that the industrial sector has performed well against the backdrop of global economic recovery. In addition, industrial sector ETFs rose by about 5% in July and outperformed the S&P 500 index

According to the latest research from Bank of America, a significant trend in the global stock market in July has been revealed: the industrial sector has become the market darling, attracting billions of dollars in investment from long funds. This phenomenon was reflected in the analysis report of quantitative strategists, who observed that as global stock markets rose, the active stock exposure of long funds increased by $10.1 billion.

After conducting in-depth analysis of 7,746 funds managing $30 trillion in assets, Bank of America found that these funds mainly increased their active exposure to the European market by adding industrial stocks, with an increase of $7.8 billion. At the same time, their active investments in the U.S. market remained stable, but there was a significant increase in investments in the industrial sector, reaching $30.3 billion, making this sector a new favorite among investors.

Nigel Tupper, a quantitative strategist at Bank of America, pointed out that historical data shows that the industrial sector tends to perform well in the context of global economic recovery. This trend is consistent with the seven economic and market indicators tracked by Bank of America's "Global Wave" tool, which showed a 1.2% increase in the MSCI Global Stock Index last month.

In the U.S., the performance of the Industrial Select Sector SPDR ETF (XLI.US) was particularly noteworthy, rising by about 5% in July, with assets close to $20 billion. This performance not only surpassed the 1.1% increase in the S&P 500 Index, but also benefited partly from the selling of tech stocks, which suppressed the benchmark index's gains.

The top 10 holdings of the Technology Select Sector SPDR ETF (XLK.US) account for approximately 36% of the fund. Here is an overview of these companies and their year-to-date performance:

  • General Electric (GE.US): an impressive 65% increase year-to-date.
  • Caterpillar (CAT.US): a 16% increase year-to-date.
  • Raytheon Technologies (RTX.US): a 40% increase year-to-date.
  • Uber (UBER.US): a 20% increase year-to-date.
  • Union Pacific (UNP.US): a modest 0.4% increase year-to-date.
  • Honeywell (HON.US): a 5.1% loss year-to-date.
  • Lockheed Martin (LMT.US): a 22% increase year-to-date.
  • Eaton (ETN.US): a 23% increase year-to-date.
  • Automatic Data Processing (ADP.US): a 13.5% increase year-to-date.
  • Boeing Company (BA.US): a 34% loss year-to-date.

These data not only demonstrate the strong momentum of the industrial sector but also reflect the market's optimistic expectations for the future potential of this sector. With the continued global economic recovery, the investment value of the industrial sector is expected to be further highlighted

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