Tuesday, May 30, 2017

Signposts: "Investors Go All-In on Tech Giants"

From Bloomberg:
  • Funds are most overweight in tech stocks on record: BofA
  • Google and Amazon shares close in on $1000 as valuations climb
Investment managers are doubling down on the hottest stocks of 2017 -- and it’s paying off.

Funds tracked by Bank of America Corp. own the highest percentage of technology stocks on record compared to their benchmark. It’s a sector that’s carried U.S. stocks to new highs, leading the S&P 500 Index with a nearly 20 percent gain in 2017. And it’s giving active managers a boost they haven’t seen in more than two years.

Of course, not all technology stocks are created equal. The returns in tech are top-heavy, dominated by Facebook Inc., Amazon.com Inc., Netflix Inc. and Google’s parent Alphabet Inc., also known as the FANG stocks, as well as Apple Inc. Those five companies alone account for more than a quarter of the S&P 500’s advance this year.

Rarely ones to shun the herd, active funds are now 71 percent overweight in the FANG companies after making the biggest move from value to growth since 2008, according to Bank of America.

“The tech stocks obviously continue to be the key group to keep an eye on,” Matt Maley, a strategist at Miller Tabak & Co., wrote in a note to clients Tuesday. “They are over-bought on a near-term and intermediate-term (and even long-term) basis, but that has been true every day for the past few weeks.” ...MORE