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BAML Survey Says These Are the Most Crowded Trades Right Now

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FAANG and BAT stocks still the most crowded

For the ninth consecutive month, the so-called FAANG and BAT stocks—the US stocks Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL) and China’s Baidu (BIDU), Alibaba (BABA), and Tencent (TCEHY)—remained the most crowded trades. These trades were determined the most crowded by 32% of professional investors, down from 36% last month.

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Rising concerns?

Concerns about tech stocks have, however, been rising lately. The latest market sell-off was led by technology stocks. The stretched valuations for technology stocks (QQQ) are especially worrisome for investors amid the outlook for growth peaking. It’s difficult to say whether these stocks’ high valuations are due to a bubble or are actually supported by future earnings growth, but investors are definitely wary of the bull run.

Other crowded trades

The other top two most crowded trades was a short position in US Treasuries (TLT), which was cited by 19% of the fund managers, and a long position in the S&P 500 (SPY) was the third most crowded trade with 18% investors citing it. The heavy sell-off in US Treasuries triggered by strong economic data and concerns of rising interest rates most likely propelled short Treasuries to the second most crowded trade.

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