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The concentration in US tech stocks has increased significantly, with 25% of large cap funds having over 40% of their portfolio in the top five holdings, a stark rise from less than 5% in December 2022. Notably, momentum is now the most crowded factor group, with funds shifting to nearly 30% overweight from a record low underweight in 2022. The XLK sector ETF is now underweight on AAPL compared to its market cap due to position concentration limits.
$XLK, the most popular sector ETF in US markets, is now dramatically underweight $AAPL vs its market cap. That’s a function of position concentration limits, with $APPL, $MSFT and $NVDA all vying for only 2 top spots.
"Momentum is now the most crowded factor group, where funds have shifted from a record low 14% underweight in 2022 to nearly 30% overweight today. Meanwhile, Value remains the most underweight group." https://t.co/SN34hOP29I via @dailychartbook https://t.co/H4VYRCYfib
"Momentum is now the most crowded factor group, where funds have shifted from a record low 14% underweight in 2022 to nearly 30% overweight today. Meanwhile, Value remains the most underweight group." - BofA Savita https://t.co/B7MLPIfniz