RBC rotates into healthcare, trims US tech exposure
XLV•RBC Capital Markets upgraded healthcare to “overweight” and cut technology to “market weight,” citing valuation concerns after a strong run in tech stocks.
1. Sector preference shifts
RBC Capital Markets said it wanted to rotate into cheaper areas of the market, upgrading healthcare to “overweight” and lowering technology to “market weight” as its valuation indicators for tech deteriorated.
2. Rationale for the move
RBC said healthcare’s relative performance has historically moved inversely to technology’s against the S&P 500, calling it “a natural destination to look to when dialing down tech exposure.” It also cited concerns about technology-sector concentration and delayed returns on investment.
