(Bloomberg) -- Short-sellers are capitulating as the S&P 500 Index keeps hitting record highs and is set for its best year since 2021, according to Citigroup Inc. strategists.

Investor positioning in S&P 500 futures is “completely one-sided,” the strategists led by Chris Montagu wrote in a note. It’s “setting new highs for a fourth consecutive week and increasingly the hold-out shorts are capitulating,” they said.

Appetite for US equities has shown no sign of abating this year. The S&P 500 made multiple record highs, surging 27%, powered by technology shares and a broad preference for US assets. The rally extended after the election of Donald Trump raised hopes of tax cuts and deregulation.

By contrast, positioning on Euro Stoxx 50 futures remains net bearish while ETF outflows are accelerating. Investors are shunning the region’s stocks amid sluggish economic and earnings growth and political instability in France and Germany.

Investors have been net short for several weeks on Europe and 100% of of futures long positions are in loss, according to the Citigroup strategists. Yet, as the selloff has been moderate so far, the risk of unwind remains low. There have been signs of long flows into DAX and FTSE 100 futures, a possible early sign of investors selectively “dipping their toes” back into Europe.

“This data however, doesn’t factor in the recent news flow on French politics which is unlikely to elicit enthusiasm for European equities for those investors that are underweight/short European equities,” Montagu said.