The 10 Most Crowded Trades in the Stock Market, According to UBS

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Google-owner Alphabet, Microsoft and Alibaba are among the most crowded stocks in the world, according to UBS.

The Swiss bank unveiled its list of the stocks that are the most overweight and underweight — or over and under-owned — by global active fund managers across different regions and countries.

When UBS first devised the measure in 2016, it was to identify potential equity bubbles and quantify the pressure on those bubbles. Back then, the bank’s analysts warned crowded trades were a risk and susceptible to share price reversals as “investors unwind their exposure in tandem,” when a shock occurs or the trade reaches its critical value.

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In UBS’s updated list published on Monday, Visa took the top spot as the most over-owned stock, followed by Adobe, Alphabet and then PayPal.

Mastercard, Salesforce, Microsoft, Alibaba, UnitedHealth and Comcast completed the top 10.

When it comes to U.S. large-cap stocks, Charter Communications, Fidelity National, Ecolab and American Tower Corp oration also make it into the top 10 most overweight stocks.

Apple was the most underweight stock, according to UBS, followed by Nestlé, Tencent, Taiwan Semiconductor and then Toyota.

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UBS aggregates positions held across global active managers using FactSet’s institutional ownership data, calculating the weights of stocks in the portfolio. That weight is then compared with the relevant equity benchmark index. Therefore, a stock is overweight in a portfolio when it represents a higher proportion of a fund manager’s holdings compared with the relevant benchmark.