Investing.com - Bank of America downgraded its view on Industrials stocks and upgraded Healthcare in a note released Monday, citing record-high positioning in capital expenditure beneficiaries and lighter crowding in the healthcare sector.

The firm said active fund managers' Industrials weights sit near record highs versus Consumer Discretionary, while positioning in AI-disrupted sectors has fallen to record lows. Exposure outside of the S&P 500 among active managers stands at 15%, close to all-time lows, down from 20% in 2020.

Bank of America raised Communication Services to market weight, joining Technology at that rating. The firm said stocks including Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) remain core holdings, consistently held by more than 80% of funds but slightly underweight given their benchmark size.

Healthcare companies screen well as idiosyncratic growth opportunities with demographic demand drivers, the firm said. The sector trades at about a 10% overweight among active managers, compared to closer to 20% ahead of prior negative policy shocks in 2015 and 2019.

Cash levels among active managers have remained at lows since 2024, while American Depositary Receipt exposure has held steady at about 2% over recent years. The firm updated its tax-loss selling screen as of September 30, 2026, identifying S&P 500 companies with year-to-date losses of at least 10% and broad overweight positioning.