Big Tech shares the most crowded trade for fourth straight month: BAML fund survey

LONDON (Reuters) - Global investors clung to their preference for the tech sector in May, with shares in so-called FAANG and BAT firms remaining the most crowded trade for the fourth straight month, according to a survey by Bank of America Merrill Lynch.

The bank said on Tuesday that its monthly survey of fund managers had found “FAANG + BAT” shares most preferred by the market and most often held in portfolios. FAANG groups the U.S. tech giants Facebook, Apple, Amazon, Netflix and Google while BAT comprises the Chinese trio of Baidu, Alibaba and Tencent.

Being “short” U.S. Treasuries as well as the dollar were also in the top three in terms of crowded trades, according to the survey of 233 fund managers managing $643 billion.

Investors remain concerned about the global economy as signs multiply that growth is decelerating. Only a net one percent of the investors thought the global economy will strengthen over the next 12 months, BAML said.

This increased pessimism was reflected in relatively high cash holdings in portfolios; while average cash balance edged down to 4.9 percent in May from 5 percent in April, they remain above the 10-year average of 4.5 percent.

Allocation to bank stocks rose to a net 36 percent overweight, the second highest level on record.