​​​​​​​Remain Positive on Equities, But Become More Selective

DWS's Investment Traffic Lights argues that the broader investment backdrop remains constructive, but after the strong rally in AI-related assets investors should become more selective, particularly within technology.

• DWS remains positive on global equities overall, supported by resilient earnings growth and a gradually improving macro environment, but believes valuations leave less room for disappointment than earlier in the year.

• The report downgrades the semiconductor sector to a neutral stance after its exceptional rally, citing expanding capacity, elevated valuations and the risk that hyperscalers slow AI spending if monetisation takes longer than expected.

• Instead of making large regional bets, DWS increasingly favours sector selection, remaining constructive on banks while turning more cautious on energy, software and financial services businesses exposed to AI disruption.

Read the full report for DWS's tactical positioning across equities, fixed income, currencies and alternative assets.