Crowded Trades

December 27th, 2016 7:32 pm | by John Jansen |

Via Bloomberg:

UBS: Here Are the Most Crowded Stocks in the World Right Now

Popularity has its pitfalls.

If you have Amazon.com Inc., Microsoft Corp. or Alphabet Inc. in your portfolio, you’re in good company.

Analysts at UBS Group AG have examined the equity holdings of actively managed funds worldwide to work out, by reference to FactSet institutional-ownership data, which stocks are the most over- and under-owned relative to their benchmark weightings.

UBS is flagging potential bubbles amid the bull market in equities that’s kept pace despite the uncertainty that surrounds the incoming Trump administration, and the elections scheduled next year across Europe. “Once these trades reach their critical value, or an exogenous shock occurs, we expect a sharp price reversal as investors unwind their exposure in tandem,” UBS had said in an earlier report alerting clients to the dangers of over-crowded positions.

The most valuable company in the world turns out to be this year’s laggard: Apple Inc. is the stock that fund managers are now most strongly underweight, according to the calculations of the UBS analysts led by Shanle Wu. That finding is backed up by data from brokerage firm TD Ameritrade, which shows that through Dec. 15, the tech giant was one of 2016’s top five most-sold stocks.

“People are starting to take profits in some companies,” JJ Kinahan, Ameritrade’s chief market strategist said in an interview. “Investors are realizing that not every trade has to or will be a home run.”

Here’s a look at the full list of the 10 most over- and under- owned companies across the globe.

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UBS Group AG
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