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.

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