Novo Nordisk (NYSE:NVO) has emerged as the most well-held European stock among Global, International, and European long-only funds, according to an investment research note from Morgan Stanley.
The report, which updates real money positioning data up to the end of the first quarter of 2024, indicates a strong conviction among fund managers in the Danish pharmaceutical giant.
Morgan Stanley's analysis encompasses 260 funds managing $1.2 trillion in assets across various regions.
Despite a broader trend where long-only funds' conviction overweights have been underperforming, Novo Nordisk has stood out.
This underperformance has been notable since the tactical market pullback in April, with conviction overweights lagging both their largest underweights and the overall market.
Interestingly, Novo Nordisk's prominence in fund portfolios has increased. European funds, in particular, have raised their positioning, now holding Novo Nordisk at 132 basis points above the benchmark, up from 109 basis points at the end of the previous year.
This increased positioning comes even as the recent market rebound has been led by less well-owned, bond yield-sensitive stocks.
Morgan Stanley suggests that the persistence of Novo Nordisk as a top holding reflects its resilience and the confidence fund managers have in its long-term prospects, despite the current market dynamics.