投资者配置：资金流动与持仓：欧洲持续领先

Disclosures & Disclaimer:This report must be read with the disclosures and the analyst certifications in the16 -19 June, The May Fair Hotel, LondonRegisterGCC Exchanges Conference 2025Amit Shrivastava*Director, Sustainability Research; EuropeanEquity StrategyHSBC Bank Middle East Ltd, DIFCamit1.shrivastava@hsbc.com+971 450 93349Sumit Charde*AssociateBangaloreIssuer of report:HSBC Bank Middle East Ltd,DIFC2 June 2025* Employed by a non-US affiliate of HSBC Securities (USA) Inc,and is not registered/ qualified pursuant to FINRA regulationsView HSBC Global Research at:https://www.research.hsbc.comEquity StrategyGlobal Disclosure appendix, and with the Disclaimer, which forms part of it. weeks.The business sentiment outlook for the region appears to beimproving on a relative basis (seechart 4) and the ECB governingcouncil’s greater confidence on the regional inflation outlook (seeECBAccount (Apr), 22 May 2025), could also be supportive for regionalassets.Europe:downside risks to cyclical holdings; Discretionary looksvulnerableIn Europe, regional funds have raised their combined holding incyclicalsectorsrelative to defensives, and currentlytheir aggregate holdingisclose to the highest level in two-years (ona5Y z-score basis).Given thatthe consensus outlook towards cyclical sectors remainssubdued (negativeEPS estimate momentum relative to defensives), and uncertaintysurrounding the risk-assetsstill remains, we see downside risks to regionalfunds’high cyclical holdings.Across key cyclical sectors,we see diverging buy/sell-side viewsontheConsumer Discretionarysector. Whereas European funds’ current sectorallocations are close toamulti-year highest level, the sell-side EPSestimate momentum is at its lowest level since at-least 2014. In our noteDefensive in the face of two seismic shocks, 10 April 2025, we argued thatweaknessinmainland China’seconomic recovery and demand couldweigh oninvestorsentiment,especially in the luxury sector.We,therefore,seethesector’s elevated holdingsasa potential risk.Also seeLVMH (MCFP): Hold: Curb your enthusiasm, one more time, 27 May 2025. Strongfundinflows:Europecontinues toleadAfter falling c16% in early April, iearoundthe‘Liberation Day’tariffs announcement by the US, global equities have shown astrong price momentumsince then,andtheyare up3.5%YTD. Consequently, amidaneasingequity marketvolatility,global equityfund inflows remain strong,andat USD365bn,YTD inflowsare at their highest levelsince 2021.As we have been highlighting in ourrecentInvestorAllocationsnotes (seeApr-2025,Mar-2025,Feb-2025,Jan-2025),inflowsintoEuropethis year so far, have outpaced the US,and thistrend continued in May-2025.Wealso find evidence ofhigherforeign fund inflows into Europe, likely signifying thatthesentiment favouring Europe is broad-based.Rotation into Europe continues;mainly funded by the USEquity fundswith globalmandateshave been rotating into keyEuropean marketsthis year. In aggregate, they have raisedtheir allocations in the UK, Germany,France,theNetherlands,and Swedenby0.7pps, YTD.This rotation islargelyfundedbythe US, mainland China, and Taiwan, where funds havelowered their holdings by a similar margin.The US, in particular,postedasharp decline (0.6pps) inYTDholdings, and as a result, it is currently among the mostunloved markets globally (see charts onpage 8).However,given the uncertainty regarding the US trade policy (Theuncertainty continues, 29 May 2025) which might weigh oninvestor sentiment, we see more downside risks tothemarketholdings.Looking ahead, we think that the trend of positivemomentum of inflowsand funds’ rotationinto Europe mightcontinue.The business sentiment outlook for the regionappears to be improvingon a relative basis (chart 4)andthe ECBgoverning council’sgreater confidence ontheregionalinflation outlook (seeECB Account (Apr), 22 May2025),couldalsosupportinvestor sentiment. Source:Morningstar,FactSet, HSBC3.Global fundsYTD-2025 change in holdings:Top and bottom three marketsSource:Morningstar, FTSE Russell,FactSet, HSBC calculations-3.5%-3.0%-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%1.0%UKweights, ppsFund weightBM weight Europe:downside risks tocyclicalholdingsIn Europe, cyclical sectors’combinedholdingshavebeenrising andrecentlytheyturnedpositiveona5-yearz-scorebasis,relative to defensive sectors. In fact, funds’ currentcyclical allocations(rel. defensives)are close to the highestlevel in almosttwo-years. Thiscontrastswith the sell-sidepassiveoutlookon cyclical sectors–theconsensus relativeEPSestimatemomentum for cyclicalsectorhas fallensharplyover the past couple of monthsand ithasturnednegativecompared to defensives.As argued in our noteDefensive in the face of two seismicshocks, 10 April 2025, the current period of uncertaintydueto concerns associated with theglobal trade and slowingeconomicgrowth,warrants a cautious stanceby equityinvestors, and henceweproposedadefensive tiltin ourEuropean Equity Strategysectorweightings. Wethereforethink thatEuropeanfunds’highcyclical