Investing.com -- The positioning in global equity markets has continued to shift towards a more underweight status, reaching the 26th percentile, according to quant strategists at Deutsche Bank (ETR:DBKGn).
Strategists, including Parag Thatte, suggests that this trend is likely to persist due to ongoing uncertainties surrounding trade policies. He added that discretionary investor positioning is now slightly underweight, standing in the 41st percentile.
However, systematic strategies positioning has seen a more pronounced decline, dropping to the lowest point in nearly two years, at the 24th percentile.
Volatility control funds have reduced their equity exposure almost to the same levels seen during last summer’s sell-off, which also sat in the 24th percentile.
Commodity Trading Advisors (CTAs) have significantly reduced their aggregate equity long positions, primarily driven by the U.S. market, where positioning has dropped dramatically and is now marginally short.
European positioning has also seen a slight decline, but it remains considerably high. Deutsche Bank reports that positioning is now underweight across most sectors, below average and continuing to fall.
The bank also notes that investor sentiment, as measured by the spread between bullish and bearish outlooks, has remained near extremely low levels.