Here's A List Of The Most Crowded Trades On Wall Street

Each quarter Credit Suisse's U.S. Equity Strategy team, led by Lori Calvasina, takes a deep dive into the stock level holdings of long-only, actively managed small, SMID, mid & large cap funds to see which stocks officially qualify as the most crowded trades on wall street.  While the results obviously vary across the size categories, Tech, Healthcare and Financials seemed to be recurring themes for the most crowded sectors at the end of Q4 2016.


Within the small cap category, 16 of the top 25 names were Tech (mostly semis) or Healthcare companies.









Small Cap



 


Retailing was particularly popular among the Mid Cap basket with Ross Stores and O'Reilly Automotive taking the lead positions as most crowded.  Meanwhile, Tech and Healthcare again represented 10 out of the 25 names.









Mid Cap



 


In the least surprising grouping of all, Microsoft, Apple and Google all topped off the list of most crowded large cap stocks with Facebook and Amazon not far behind.  Meanwhile Merck and Pfizer ranked near the top of the list in the healthcare sector and JP Morgan and Wells Fargo topped off the most crowded names among large cap financials.









Large Cap



 


Finally, the SMID category was, once gain, dominated by Healthcare and Tech names which accounted for half of the grouping's most crowded trades.









SMID



 


And while not terrible shocking, we were amused to find that the most crowded trades underperformed their benchmarks in every single size category in 2016.









Returns



 


And, with a few exceptions, the names pretty much underperformed every quarter and every month out of the year as well.









Returns



 


Taking a look at the longer-term, Credit Suisse also points out that the crowded trades have consistently underperformed for the past 5 years.









Fund Returns



 


And scouring the quarterly 13Fs of the most prominent hedge funds seemed like such a great idea...we knew it was a bad idea to track Paulson...oh well, back to the drawing board.







Sign Up

Get the InvestingChannel
Free e-Letter Today

Learn More

Independent market opinion, analysis and ideas - delivered every business day

Premium market opinions, analysis, and ideas - delivered every business day

Editor's Picks