UBS's weekly compilation of most and least crowded trades for the week ended Oct. 20 did not show much change from the previous week, except for some slight reshuffling in the order. The only notable change in the compilation being International Business Machines Corp. (NYSE: IBM)'s entry into the list of the least crowded trades, replacing Commonwealth Bank of Australia (ASX: CBA).
Crowded trade is an asset class or an investment theme that has attracted an unusually large number of market participants.
How The List Is Compiled
Analyst Shanle Wu spearheaded the compilation of this list, which comprises stocks that were most overweight and underweight by global active fund managers across different regions and countries across the globe, including a) developed markets, b) global emerging markets and 3) Asia, excluding Japan and the ten major markets in the region.
UBS compiles this list based on data on institutional ownership from FactSet. The firm sums up all the holdings in dollar value across all the active managers, calculates the weights of stocks in this active trading portfolio, and then compares the weight with the relevant equity index benchmark to form the active weight.
How Does It Help?
The underweighted stocks could be considered as value buys if traders are enamored with contrarian trades and bet on turnarounds. On the contrary, short sellers could take a position in the most crowded stocks eyeing profits in the eventuality of sentiment toward a crowded stock beginning to sour.
The Most Crowded Stocks
The Least Crowded Stocks
Latest Ratings for AFL
|Oct 2017||Goldman Sachs||Initiates Coverage On||Neutral|
|Sep 2017||Bank of America||Downgrades||Neutral||Underperform|
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