Investor Allocations: Less crowded, more conviction: flows broaden beyond US into Europe & GEMs

Research evidence excerpt

Investor Allocations: Less crowded, more conviction: flows broaden beyond US into Europe & GEMs

DIFC

changes in institutional funds’ risk tolerance to global equities, has also jumped Industrials look attractive: Regional funds have also raised their exposure to

to its highest level in at least 10 years (chart 16). This likely points to a still Industrials from low levels (chart 8) and we expect further buying given a 30 July 2026

resilient outlook for risk assets (see Why risk assets are so resilient, 27 July supportive consensus growth outlook, improving EPS revisions momentum and * Employed by a non-US affiliate of HSBC Securities (USA) Inc,

2026) and strengthening buy-side confidence, alongside signs of tentative – potential longer-term tailwinds from EU fiscal stimulus plans. Please note, we and is not registered/ qualified pursuant to FINRA regulations

though still fragile – de-escalation in the Middle East conflict. are overweight Industrials and underweight Staples in our European sector View HSBC Global Investment Research at:

Cross-sector holdings suggest easing IT concentration: Our buy-side weightings (Developed EMEA Equity Signals, 28 July 2026). https://www.research.hsbc.com

holdings data provides additional evidence in the debate around potential AI Contrarian ideas from stock-level holdings in Europe: Our analysis of stock

fatigue and the broadening of market positioning beyond the IT sector. Using level positioning by equity funds across the FTSE Europe index constituents

the Herfindahl–Hirschman Index (HHI), we observe a decline in the share of (see page 4 for methodology and back-test results) helps identify the most/least

active positions in IT, resulting in lower overall sector concentration (chart 2).