In May, professional investors became even more wary of shares of technology companies. This is reported by CNBC with reference to the survey of Bank of America among fund managers.

According to the survey, managers reduced their positions in shares of technology companies by 23 percentage points compared to the previous month – up to 12%. That was the lowest in nearly 16 years – since August 2006.

Michael Hartnett, chief investment strategist at Bank of America, observed a “major reversal” in investor sentiment, with investors taking an “extremely bearish” stance toward the tech sector, even though their rating on such assets has been at an “overweight” level for the past 14 years. That is, during this period, they believed that technology stocks would outperform the market and sought to increase their share of portfolios.

The decline in tech stocks was undertaken because of concerns that the U.S. Federal Reserve (Fed) would have to raise interest rates more than expected to combat 40-year record inflation, CNBC notes. These growth-oriented securities are more sensitive to high rates. The reason is that high rates make the future earnings potential of technology companies less attractive as the cost of capital and innovation increases, the publication writes.