DB Parag Thatte Investor Positioning and Flows Sep 18 1

Global Asset Allocation Date 18 September 2026 Investor Positioning Strategy Update and Flows

Discretionary Investors Very Cautious Already Parag Thatte Strategist n As we noted last week, equities have been battling a slew of catalysts that have previously been negative in the short run (sharply higher oil prices and Binky Chadha rates, escalating geopolitical and trade tensions, and a large dose of AI Chief Strategist fears) but have remained in a tight range, strengthening our read that investor positioning and sentiment is very cautious already. Karthik Prabhu Strategist n Systematic strategies continue to raise equity exposure amidst subdued volatility (0.87sd, 90th percentile) but discretionary investors (0.06sd, 46th percentile) have pulled back and are barely above neutral. Survey sentiment Dag Workayehu measures have plunged to the bottom of their long-run range (5th Strategist percentile). Overall, large-cap equity positioning is modestly overweight sd, 65th percentile). While that may not seem particularly cautious, we note that it is in line with earnings growth of around 10% yoy, well short of the levels implied by the unprecedented boom in growth that is unfolding (Looking Out To Year End: Still Constructive, Sep 18 2026). We forecast 30% growth in the Q3 season beginning in just under a month and note that the pattern has been to rally going into earnings seasons. n The equity market reaction to the FOMC meeting this week was in line with the recent pattern of being down on the day followed by a rally the day after. n Across sectors, positioning is above neutral for large-cap Tech and Energy, and only modestly so, while most other sectors, cyclical as well as bond-like defensives are underweight, either on growth concerns or rising rates or both.

Positioning and flows details on page 5

Deutsche Bank Securities Inc. IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Investor Positioning and Flows

Figure 1: The S&P 500 stuck to its recent pattern around FOMC meetings, selling off on the day of the FOMC and then rallying back the day after

2.0 S&P 500 performance around FOMC meetings (%) 2.0 1.5 On the day Next day

Jun 2025 Jul 2025 Dec 2025 Apr 2026 Jun 2026 Jul 2026 May 2025 Sep 2025 Oct 2025 Jan 2026 Mar 2026 Sep 2026

Source : Bloomberg Finance LP, Deutsche Bank Asset Allocation

Figure 2: Systematic strategies have continued to raise equity positioning but discretionary investors have pulled back close to neutral

Large cap Equity Positioning 1.5 1.5 Discretionary Investors Systematic Strategies 1.0 1.0

-1.0 -1.0 Current percentiles Discretionary: 46% -1.5 -1.5 Systematic: 90%

Jan-24 Mar-24 Jul-24 Sep-24 Jan-25 Mar-25 Jul-25 Sep-25 Jan-26 Mar-26 Jul-26 Sep-26 May-24 Nov-24 May-25 Nov-25 May-26 Nov-26 *Wtd average of Z-scores for positioning and flows indicators, weights based on explanatory power in regression of equity performance on indicators

Source : Deutsche Bank Asset Allocation

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