Active, growth- and earnings-focused fund managers are increasingly skeptical of the US equity rally. Deutsche Bank's compilation shows active investors' equity allocations have fallen to the lower third of their historical range, citing elevated US Treasury yields, the Iran war and persistent inflation. At the same time, major indices have risen and volatility has eased, prompting systematic/quant funds to keep buying and remain overweight US equities. The resulting active underweight versus sy

Active, growth- and earnings-focused fund managers are increasingly skeptical of the US equity rally. Deutsche Bank's compilation shows active investors' equity allocations have fallen to the lower third of their historical range, citing elevated US Treasury yields, the Iran war and persistent inflation. At the same time, major indices have risen and volatility has eased, prompting systematic/quant funds to keep buying and remain overweight US equities. The resulting active underweight versus systematic overweight gap is the second-largest since 2020. Deutsche Bank strategist Parag Thatte said: "This divergence has little room to widen further, so one side will likely give ground soon."