Funds sell $44bn in semiconductors on AI concerns

Investing.com -- Active long-only funds sold $44.2 billion worth of shares in the global semiconductor sector last month amid concerns about the sustainability of the AI investment theme, according to BofA.

The sales marked a sharp shift in positioning, with funds instead adding $16.7 billion to the global telecom sector, the largest inflow among sectors tracked.

By region, funds sold $64.8 billion in US equities and $25.9 billion in European shares, while purchasing $13.9 billion in Japanese stocks during the same period.

Year-to-date, Japan has received the most fund inflows at $34.1 billion, followed by the global energy sector at $28.2 billion and materials sector at $25.7 billion.

The largest overweight positions by dollar value for global long-only funds relative to their benchmarks now include Phillip Morris and Meta Platforms in the US, ASML and BA Tobacco in Europe, Keyence and Hitachi in Japan, and TSMC and Samsung Electronics in emerging markets.

Over the past year, funds have purchased the most shares in energy storage, precision medicine, space, and cybersecurity among 20 global themes tracked by BofA's analysis. Funds sold the most in AI compute and quantum computing during the same period.

Following these adjustments, funds are now most overweight precision medicine, luxury lifestyle, and grid modernization, while maintaining the largest underweight positions in quantum computing and AI platforms.

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