Explaining A 'Crowded Trade,' And The Top 10 Cramped Plays Right Now

Simply put, a "crowded trade" refers to a stock that is widely held across active managers in different countries across the world.

Analysts at UBS compiled a list of the top 10 crowded trades based on the sum of all the "holdings in dollar value across all the active managers and calculate the weights of stocks in this active trading portfolio." Investors can likely come to one of two conclusions regarding a "crowded trade" stock:

  • If so many fund managers across the world own a stock they must do so for a reason and expect a superior return.
  • If so many fund managers across the world own a stock then it is likely too late for the individual investor to buy the stock and expect a superior return.

Investors are free to come to their own conclusions as to how to view a "crowded trade."

Overweight Names

Here are the top 10 Overweight names as compiled by UBS.

  • AFLAC Incorporated AFL.
  • Alibaba Group Holding Ltd BABA.
  • UnitedHealth Group Inc UNH.
  • Microsoft Corporation MSFT.
  • Broadcom Ltd AVGO.
  • Visa Inc V.
  • Priceline Group Inc PCLN.
  • Alphabet Inc GOOG GOOGL.
  • Comcast Corporation CMCSA.
  • Medtronic plc. Ordinary Shares MDT.

Underweight Names

Here are the top 10 Underweight names as compiled by UBS.

  • Apple Inc. AAPL.
  • Exxon Mobil Corporation XOM.
  • Johnson & Johnson JNJ.
  • Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).
  • Procter & Gamble Co PG.
  • General Electric Company GE.
  • Tokyo-listed Toyota Motor Corp 7203.
  • London-listed HSBC Holdings plc HSBA.
  • Australia-listed Commonwealth Bank of Australia CBA.

Posted In: Crowded TradeFund ManagersUBSAnalyst ColorLong IdeasEducationShort IdeasAnalyst RatingsTrading IdeasGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.