By the end of November, holdings of US equities relative to the rest of the world were close to the most stretched in the 26-year history of State Street Global Markets’ data.
Long-term investors are heading into 2025 with their biggest overweight in equities in sixteen-and-a-half years, says Michael Metcalfe, head of macro strategy at State Street Global Markets. “While there are plenty of uncertainties about growth, policy and politics in the coming year, investor positions suggest their conviction in a US-led equity market rally is unflinching.”
Not only is the overweight in equities high historically, it is also concentrated, says Metcalfe in a Dec 9 note. “Across the regions we track, the US is the only zone investors are currently overweight and it is a sizeable holding.”
