Deutsche Bank Research

Investor Positioning and Flows

The Boom And The Gloom

The equity market has once again been in a tight range, in place for 2 months now, accompanied by notable rotations, echoing the period from November to February (Rotation Continued Amidst The Chop, Jan 2026). This week it fell to near the bottom of the range as positioning slipped to neutral. While the Q2 earnings reporting season so far confirms the boom that began in Q1 is accelerating, it has been overshadowed by the gloom around surging Tech capex, escalating geopolitical risks, climbing oil prices and rising rates. We note:

Parag Thatte · Binky Chadha · Karthik Prabhu · Dag Workayehu下载原始 PDF

Booming Q2 earnings handily beating a very high bar. Two weeks in and about a third of the way through the season, nearly 90% of the companies have beat, with aggregate earnings coming in 10% above consensus. S&P 500 earnings growth for Q2 is on track to hit 34% yoy, well above the high bar of 26% set by consensus and our expectation of 29% (Looking For Growth In The High 20s, Jun 30 2026). While MCG & Tech growth (53%) is massive, that for the rest (23%) is also very strong. And looking ahead, consensus numbers for Q3 and Q4 as well as 2027 have continued to rise, which contrasts with the typical pattern of forward estimates falling through the season.

Gloom around a host of concerns, however, has seen equity positioning fall to neutral. Discretionary investors (17th percentile) have cut exposure back to early-April lows. Their positioning is well below levels implied by earnings as well as macro growth. Systematic strategy positioning (70th percentile) meanwhile is still relatively elevated and vulnerable if volatility picks up or if equities break out of the range to the downside.

Rotation out of large-cap Tech about three quarters of the way through as positioning slides from elevated levels. As we noted over the last 2 weeks, large-cap Tech positioning had bounced to elevated levels coming into this earnings season. Even with extremely strong Q2 results, positioning has fallen sharply to nearly neutral (56th percentile) on concerns around runaway capex and the sustainability of off-the-charts growth. It is notable that after reporting results, Tech companies have so far sold off on the day (-1.9pp median) while the rest have on average been flat. The rotation out of MCG & Tech which began on cue in early June (Rotation On Cue, Jun 5 2026) has seen them underperform the rest of the S&P 500 by almost 15pp, about three-fourths of the way down from the top of the long-run relative performance channel (14% annualized, 20% top to bottom).

Disruption premium in oil has shot up but is still below March extremes. The renewed escalation in the Middle East has seen oil prices rise about 40% so far. Oil prices are now more than 50% above our estimate of medium-term fair value based on global growth and the US dollar, well beyond the typical band of +/- 30% on either side. At the peak in March, they were 75% above. Similarly, the premium in the front month contract relative to that 6 months out has shot up, as has oil price volatility but both are still below March peaks.

Rising rates reflect Fed hiking expectations but breakeven inflation rates have not risen meaningfully on the latest flare up in oil prices. Compared to the start of the Iran war in late February, 10y real rates are now more than 70bps higher, and 2y real rates about 170bps higher, as expectations for Fed rates have moved from cuts to hikes. Rates volatility in turn has also risen, which as we have pointed out in the past, is usually a temporary drag on equities (Higher Rates or Higher Vol? Nov 2022). Breakeven inflation rates meanwhile have not yet risen significantly this month despite the ramp up in oil prices, and a catch up remains a risk.

Figure 1The S&P 500 is once again stuck in a narrow range …
Figure 2… accompanied by rotations
Figure 3The rotation out of MCG & Tech is about three-fourths of the way through in our reading
Figure 4Equities have gone sideways despite Q2 delivering a sharp increase in earnings
Figure 5Consensus estimates for Q3 (as well as for Q4 and 2027) have continued to rise in the earnings season so far …
Figure 6… in contrast to the typical pattern of cuts to forward estimates during the season
Figure 7Aggregate equity positioning has fallen to neutral on the back of sharp cuts in exposure by discretionary investors to their lowest level since early April, while the positioning of systematic strategies remains relatively high
Figure 8Positioning in large-cap Tech has been cut sharply from elevated levels to near neutral
Figure 9Large cap equity positioning is well below levels implied by earnings growth …
Figure 10… as is positioning in large-cap Tech as investors remain focused instead on surging capex and the sustainability of growth
Figure 11MCG & Tech companies have notably underperformed on the day of reporting on average, while the others have performed in line
Figure 12Oil prices have risen sharply this month and are more than 50% above our estimate of medium-term fair value, …
Figure 13… well above the +/- 30% seen historically, but below the March highs
Figure 14The premium in the front month contract relative to that 6 months out has jumped but remains below the March peaks …
Figure 15… as has the volatility in oil prices.
Figure 16The increase in oil vol is also raising rates vol, which is usually a temporary drag on equities
Figure 1710y break even inflation rates have essentially gone sideways but 10y real rates have risen significantly as expectations for the Fed have shifted from cuts to hikes
Figure 18Breakeven inflation rates have not yet risen significantly despite the run up in oil prices, and a catch up remains a risk

Positioning and flows detail

Our measure of aggregate equity positioning fell from modestly overweight to slightly below neutral this week (-0.05sd, 36th percentile). Discretionary investor positioning declined sharply to notably underweight (-0.52sd, 17th percentile), taking it to its lowest level since early April. Systematic strategies’ positioning (0.52sd, 70th percentile) was pared but stayed overweight. Positioning in large caps (0.23sd, 56th percentile) was trimmed to modestly overweight, while positioning in large-cap Tech (0.11sd, 56th percentile) declined sharply from extended levels to near neutral. Meanwhile, positioning in small caps (-0.13sd, 37th percentile) rose this week to slightly underweight.

Discretionary investor positioning is now well below the tight range in place since Liberation Day.

The ratio of call to put volume (5d ma) declined this week (36th percentile). Net call volume for single stock and ETF options declined, while that for index options rose modestly. Within single-stock options, volume declined sharply, primarily for MCG & Tech, followed by Financials. S&P 500 options skew (3m, 90%-110%) increased from last week.

A basket of stocks with the highest net call volume in the prior week modestly outperformed the broader market this week, while a basket of the most-shorted stocks performed largely in line.

Investor sentiment (bull minus bear spread) reversed to bearish again, the lowest in six weeks (15th percentile). Bullish responses (22nd percentile) tumbled to their lowest in 10 months, while both bearish (86th percentile) and neutral responses (38th percentile) rose.

Under systematic strategies positioning,

Vol control funds’ equity allocation declined this week but remained elevated (76th percentile). Their sensitivity to market selloffs increased, making them more likely to de risk on downside moves than in recent weeks. While positioning is no longer near its recent extremes, they remain meaningfully invested in equities, with a higher sensitivity to volatility suggesting a less supportive backdrop in market drawdowns.

CTAs’ positioning in equities eased slightly but remained in the upper end of its historical range (66th percentile). Positioning declined across most regions, with Europe (78th percentile) and the US (67th percentile) remaining the largest long positions, while EM (60th percentile) and Japan (39th percentile) lagging. Further increases in equity exposure are likely to be driven more by declines in volatility than by additional strengthening in trend signals. A meaningful drop in equities (>3%) could see CTAs start to cut positions. Across other asset classes, short positioning in bonds remains elevated (US 15th percentile, European 13th percentile), longs in the dollar remain high (87th percentile), and in commodities, positioning in gold remains short (25th percentile), while longs in copper (91st percentile) and oil (71st percentile) remain high.

Risk parity funds became modestly more constructive this week. Equity allocations increased to slightly above neutral (55th percentile), while bond allocations declined (39th percentile). Equity exposure rose across regions, led by developed markets exUS (62nd percentile) and the US (53rd percentile), while EM remained more modest (37th percentile). Allocations to US bonds moved lower (45th percentile), to inflation-linked securities remained elevated (75th percentile), and to commodity exposure stayed near historical highs (96th percentile). Overall, the funds continued to shift toward equities while maintaining meaningful exposure to inflation-linked securities and commodities.

Across sectors, positioning in large-cap MCG & Tech fell sharply to near neutral. Positioning in MCG & Tech (-0.16sd, 36th percentile) declined this week to modestly underweight, while that in large-cap Tech (0.11sd, 56th percentile) also declined sharply from stretched levels to modestly overweight. Energy (0.40sd, 83rd percentile) rose to overweight. Other cyclical sectors are notably underweight: Financials (-0.67sd, 18th percentile), Consumer Cyclicals (-0.82sd, 11th percentile), Industrial Cyclicals (-1.03sd, 5th percentile), and Materials (-1.27sd, 1st percentile). Among defensives, Utilities (0.16sd, 63rd percentile) stayed modestly overweight, while Real Estate (-0.23sd, 42nd percentile) slipped to modestly underweight. Healthcare (-0.37sd, 34th percentile) is modestly underweight, while Consumer Staples (-0.95sd, 3rd percentile) is very underweight.

Weekly fund flows to ETFs & mutual funds: Equity funds ($30.4bn) received inflows again largely driven by Asia ($21.3bn), even as the US (- $7.2bn) suffered outflows. Inflows to bond funds ($14.9bn) moderated to a three-month low, while money market funds (-$33.9bn) saw outflows.

Inflows to equity funds ($30.4bn) remained strong but slowed to a three-week low. Inflows were driven largely by Asia ex-Japan ($27.2bn), particularly China ($21.3bn) and Taiwan ($4.8bn), while inflows to Korea ($1.5bn) slowed. Among other EM funds, broad-EM ($1.9bn), Latam ($0.4bn), and EMEA (0.1bn) also received inflows. Broad-global funds ($6.8bn) continued to get inflows, but the pace weakened to the lowest in 11 weeks. US (-$7.2bn) and Europe (-$1.6bn) suffered outflows this week after consecutive weeks of inflows. Japan ($1.5bn) continued to receive steady inflows for a seventh straight week.

Among dedicated sector funds, inflows to Tech ($4.0bn) slowed sharply. Financials ($1.4bn) received inflows for a fourth consecutive week, albeit at a slower pace. Healthcare ($0.8bn) received inflows for a seventh straight week. Energy and Utilities received modest inflows of $0.2bn each. Conversely, Industrials (- $0.8bn), Real Estate (-$0.5bn), Telecom (-$0.5bn), Materials (- $0.4bn), and Consumer Goods (-$0.3bn) saw outflows.

Inflows to bond funds ($14.9bn) weakened to a three-month low. Inflows to broad-mandate funds ($5.2bn), Government bonds ($5.7bn), and IG ($1.1bn) slowed further from last week. HY ($0.4bn) and EM ($0.9bn) received modest inflows. Bank Loans ($1.0bn) received steady inflows again, while inflows to Munis ($0.3bn) slowed sharply. TIPS ($0.4bn) and MBS ($0.3bn) received modest inflows.

Money market funds (-$33.9bn) saw outflows for a second week in a row, albeit at a slower pace than last week’s massive outflows. US (-$23.8bn), Europe (-$9.7bn), and Japan (-$0.5bn) saw outflows this week.

DB S&P 500 Forecasts

  • S&P 500 2026 target 8000
  • S&P 500 2026 EPS $342
  • S&P 500 2027 EPS $390
Figure 19Consolidated equity positioning1
Figure 20Discretionary vs systematic strategies divide2
Figure 21All equity positioning indicators
Figure 22Systematic strategies positioning vs S&P 500 realized volatility
Figure 23Discretionary investor positioning vs ISM Manufacturing
Figure 24Discretionary investor positioning vs S&P 500 earnings growth
Figure 25Equity positioning across sectors3
Figure 26Mega-cap growth & Tech positioning
Figure 27Financials positioning
Figure 28Energy positioning
Figure 29Consumer cyclicals positioning
Figure 30Industrial cyclicals positioning
Figure 31Materials positioning
Figure 32Consumer Staples positioning
Figure 33Healthcare positioning
Figure 34Real Estate positioning
Figure 35Utilities positioning
Figure 36Small caps positioning
Figure 37Major sector groups positioning
Figure 38Cyclical minus defensives positioning
Figure 39Systematic strategies positioning
Figure 40Vol-Control equity allocations
Figure 41CTAs exposure to equities
Figure 42Risk-Parity portfolio weight in equity
Figure 43Vol-Control funds equity allocations6
Figure 44Vol-Control funds equity allocation and estimated observed equity volatility
Figure 45Vol metrics breakdown
Figure 46Vol-Control funds sensitivity to a 2% market sell-off
Figure 47CTAs exposure to equities
Figure 48CTAs exposure to equity categories (z scores)
Figure 49CTAs exposure to bonds
Figure 50CTAs exposure to bond regions (z scores)
Figure 51CTAs exposure to the US dollar
Figure 52CTAs exposure to Currencies (z-scores)
Figure 53CTAs exposure to Oil
Figure 54CTAs exposure to major Commodities
Figure 55Risk-Parity portfolio weight in equity
Figure 56Risk-Parity portfolio weight in equity regions (z scores)
Figure 57Risk-Parity portfolio weight in bonds
Figure 58Risk-Parity portfolio weight in US inflation-linked bonds
Figure 59Risk-Parity portfolio weight in Commodities
Figure 60Risk-Parity portfolio weight in US REITs
Figure 61Investor bull minus bear spread 9
Figure 62Investor bullish sentiment
Figure 63Investor bearish sentiment
Figure 64Investor neutral sentiment
Figure 65Median cash shorts taken as % of shares outstanding for the Russell 300010
Figure 66Median cash shorts taken as % of shares outstanding for the S&P 500, Russell 2000 and Nasdaq 100
Figure 67Cash equities short interest as % of market cap 11
Figure 68Cash equities short interest across indices as % of market cap12
Figure 69S&P 500 sectors median cash shorts taken as % of shares outstanding
Figure 70S&P 500 sectors cash equities short interest as % of market cap
Figure 711-month change in sector-wise short interest
Figure 72Short interest basket relative performance
Figure 73Equity call/put volume ratio 13
Figure 74Equity call vs put volumes
Figure 75Total net call volume
Figure 76Net call volume of single stocks, Index and ETFs
Figure 77All stocks net call volume across sector groups
Figure 78S&P 500 stocks net call volume across sector groups
Figure 79Net call volume of stocks outside of the S&P 500 across sector groups
Figure 80Relative performance of a basket of stocks with the highest call volume in the previous week
Figure 81Net bullish opened option volume for all customers 14
Figure 82Net bullish opened option volume by customer category
Figure 83S&P 500 realized and implied volatility
Figure 84S&P 500 1m realized and implied correlation
Figure 853M implied vol and skew
Figure 86Blended mutual funds beta to the S&P 500
Figure 87Equity L/S HFs beta to the S&P 500
Figure 88Summary of fund flows across assets and categories
Figure 89Recent trends in fund flows across asset classes and categories
Figure 90Flows across major asset classes last 4 weeks
Figure 91Flows across major asset classes in last 12 months
Figure 92Cross-asset flows last 4 weeks
Figure 93Cross-asset flows in last 12 months
Figure 94Recent trends in fund flows across equity fund categories
Figure 95Regional equity fund flows last 4 weeks
Figure 96Equity flows across regions
Figure 97Sector fund flows last 4 weeks
Figure 98Sector fund flows
Figure 99US equity flows into thematic funds last 4 weeks
Figure 100US equity flows into thematic funds
Figure 101Weekly flows into cryptocurrency funds
Figure 102Cumulative flows into cryptocurrency funds
Figure 103Recent trends in fund flows across bond fund categories
Figure 104Bond fund flows by category last 4 weeks
Figure 105Bond flows by category
Figure 106Bond fund flows by maturity last 4 weeks
Figure 107Bond fund flows by maturity
Figure 108Credit fund flows to US and Europe last 4 weeks
Figure 109Credit fund flows to US and Europe
Figure 110Bond fund flows across regions last 4 weeks
Figure 111Bond fund flows across regions
Figure 112Cross-asset futures positioning
Figure 113Week-over-week changes in futures positioning
Figure 114Aggregate US equity futures positioning
Figure 115Aggregate US equity futures and S&P 500 ratio to its 200d ma
Figure 116Aggregate US equity futures and ISM Manufacturing
Figure 117US equity futures positioning
Figure 118Current US equity futures positioning
Figure 119US equity futures positioning by asset managers and leveraged funds
Figure 120S&P 500 futures positioning
Figure 121S&P 500 futures positioning by asset managers and leveraged funds
Figure 122Russell 2000 futures positioning
Figure 123Russell 2000 futures positioning by asset managers and leveraged funds
Figure 124Nasdaq 100 futures positioning
Figure 125Nasdaq 100 futures positioning by asset managers and leveraged funds
Figure 126EM equity futures positioning
Figure 127EM equity futures positioning by asset managers and leveraged funds
Figure 128Aggregate bond futures positioning in thousand contracts
Figure 129Aggregate bond futures positioning in % of open interest terms
Figure 130Bond futures positioning by maturity
Figure 131Bond futures positioning by maturity
Figure 13230d Fed Fund futures positioning
Figure 13330d Fed Fund futures positioning by asset managers and leveraged funds
Figure 134SOFR futures positioning
Figure 135SOFR futures positioning by asset managers and leveraged funds
Figure 1362y Treasury notes futures positioning
Figure 1372y Treasury notes futures positioning by asset managers and leveraged funds
Figure 1385y Treasury notes futures positioning
Figure 1395y Treasury notes futures positioning by asset managers and leveraged funds
Figure 14010y Treasury notes futures positioning
Figure 14110y Treasury notes futures positioning by asset managers and leveraged funds
Figure 14215-25y Treasury bonds futures positioning
Figure 14315-25y Treasury bonds futures positioning by asset managers and leveraged funds
Figure 14425y+ Treasury bonds futures positioning
Figure 14525y+ Treasury bonds futures positioning by asset managers and leveraged funds
Figure 146US trade-weighted dollar positioning
Figure 147Major currency futures positioning
Figure 148Currency futures positioning
Figure 149Currency futures positioning by asset managers and leveraged funds
Figure 150US trade-weighted dollar positioning
Figure 151US trade-weighted dollar positioning by asset managers and leveraged funds
Figure 152Euro futures positions
Figure 153Euro futures positioning by asset managers and leveraged funds
Figure 154Yen futures positions
Figure 155Yen futures positioning by asset managers and leveraged funds
Figure 156Sterling futures positions
Figure 157Sterling futures positioning by asset managers and leveraged funds
Figure 158Canadian dollar futures positions
Figure 159Canadian dollar futures positioning by asset managers and leveraged funds
Figure 160Aussie dollar futures positions
Figure 161Aussie dollar futures positioning by asset managers and leveraged funds
Figure 162Swiss franc futures positions
Figure 163Swiss franc futures positioning by asset managers and leveraged funds
Figure 164New Zealand dollar futures positions
Figure 165New Zealand dollar futures positioning by asset managers and leveraged funds
Figure 166Mexican peso futures positions
Figure 167Mexican peso futures positioning by asset managers and leveraged funds
Figure 168Brazilian real futures positions
Figure 169Brazilian real futures positioning by asset managers and leveraged funds
Figure 170Oil futures positioning
Figure 171Oil futures gross longs and shorts
Figure 172Copper futures positioning
Figure 173Gold futures positioning
Figure 174Energy futures positioning
Figure 175Precious metals futures positioning
Figure 176Industrial metals futures positioning
Figure 177Agri commodities futures positioning
Figure 178S&P 500 weekly announced buybacks
Figure 179S&P 500 sectors announced buybacks
Figure 180S&P 500 announced and actual buybacks
Figure 181Buyback baskets performance
Deutsche Bank Research

Report date 24 July 2026. Source material supplied as a 52-page PDF.

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