[ad_1]
Professional investors are increasingly skeptical of the stock market’s popular stocks.
Large-cap fund managers are starting to shy away from some of the biggest companies in the S&P 500, according to a recent report from UBS. The firm found that sentiment toward mega-cap tech companies like Microsoft (MSFT), Alphabet (GOOGL), and Apple (AAPL) is deteriorating the fastest.
By leveraging these three names and top performers like Nvidia (NVDA), asset managers are swimming against the tide. Large-cap growth stocks have driven the market higher last year, so a shift away from them now suggests that yesterday’s laggards could become tomorrow’s leaders.
If that bet is premature or completely off the mark, active managers will almost certainly end up trailing the market. But in a sea of mutual funds, picking the right stocks is a good way to stand out. That’s why large-cap stocks tend to overshadow the biggest companies, according to UBS.
UBS strategists led by Patrick Palfrey wrote in a note in late February that Apple, Nvidia and Tesla (TSLA) are the least weighted large-cap portfolio managers compared to the S&P 500.
10 stocks that fund managers love
By contrast, fund managers’ largest relative positions are in sectors such as industrials, financials, healthcare and materials, Palfrey said.
UBS
But there are deep divisions within those groups. For example, smart money investors believe that companies in industries such as financial services, insurance, medical devices, and healthcare services will outperform, but companies such as banking, biotech, and pharmaceuticals are underweight.
Below are the 10 companies with the biggest improvements in large-cap fund manager sentiment, as measured by the net number of funds adding positions. Each also displays the ticker, market cap, and sector.
[ad_2]
Source link
