Investor Positioning and Flows Aug 10

Global Asset Allocation Date 7 August 2026 Investor Positioning Strategy Update and Flows

Another Sharp Catch Up Rally Parag Thatte Strategist n After 2 months of going sideways in a tight range until the middle of last week, the S&P 500 jumped well above in just 4 days. Unlike most such sharp Binky Chadha rallies, which typically occur after a sizable selloff, this one occurred with Chief Strategist the S&P 500 just 4% below record highs.

Karthik Prabhu n Despite the sharp rally, the S&P 500 has just caught back up to the bottom Strategist of the strong uptrend channel in place now for nearly 4 years (23% annualized). This continues the pattern since Liberation Day last year of periodic drops below the channel followed by rapid catchup rallies, Dag Workayehu followed by a noisy ride up along the bottom. Strategist n It is also the 2nd quarter in a row when the market has been rangebound for an extended period before breaking out during earnings season, reflecting a resistance to position for the exceptional earnings growth being delivered but also bursts of catching up towards it (The Boom And The Gloom, Jul 24 2026). n Large cap equity positioning (87th percentile) has jumped from near neutral last week to now clearly overweight, although not to an extreme. It is currently in line with S&P 500 earnings growth in the mid-teens, well below the 33% we just got in Q2. n The jump in positioning has been led by that in large-cap Tech which is again quite elevated (95th percentile), although still below the highs seen in October last year and again in early June. Relative performance of Tech was at the bottom of its long-run channel last week but has now risen to the middle, continuing the 5th such rotation in the last 3 years (Rotating On Cue Again, Jul 31 2026). n Equity fund inflows ($33bn) this week were again strong but below the blistering pace of the last four weeks (a record $52bn on average every week). Across geographies, the drop came for China funds (outflow of - $2.6bn this week vs an average of $16bn last 4 weeks) and to a lesser extent the US ($10bn this week vs $16bn average). Across sectors there was a big drop for Tech (-$0.7bn vs $14bn average). Meanwhile, bond funds ($23bn) saw a broad-based pick up across categories with inflows to HY ($4bn) jumping notably to the highest in 2 years.

Positioning and flows details on page 8

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Investor Positioning and Flows

Figure 1: For a second quarter in a row, the S&P 500 was rangebound for an extended period before breaking out during earnings season

7900 S&P 500 performance since S&P Width of 7100 range: 3.1% 7100 Width of range: 2.8% Iran war: -8.7% Q1 earnings 6100 Q2 earnings season season 5900 5900

Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Feb-26 Mar-26 Apr-26 Jun-26 Jul-26 Aug-26 Sep-26 Jan-26 May-26

Source : Bloomberg Finance LP, Deutsche BankAsset Allocation

Figure 2: The S&P 500 has again caught back up to the bottom of the strong trend channel in place for almost 4 years

Log S&P 500 trend channel since Oct 2022 Log 8050 Trend growth rate (Oct 2022 to Mar 2025) = 22.7% (annualized) 8050 Range = +/- 4.6%

Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26

Source : Bloomberg Finance LP, Deutsche BankAsset Allocation

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