Bank of America: Pacific Positioning – Distinguishing Crowded Trades
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Bank of America's latest quantitative strategy report reveals that over the past 12 months, "crowded positive" stocks—defined as those with high institutional ownership combined with positive triple momentum—outperformed "crowded negative" stocks by 36.0%. This finding challenges the market consensus that crowded trades inevitably lead to subsequent weakness.
As of April 2026, global long-term funds increased their positions in Australia (net buy of $3.8 billion) and India (net buy of $2.9 billion) against a backdrop of a 15% rise in the MSCI Asia-Pacific (ex-Japan) index. Conversely, funds significantly reduced exposure to China (net sell of $39.7 billion) and South Korea (net sell of $13.6 billion). At the sector level, capital flowed into Energy (+$1.4 billion) and Materials (+$0.9 billion), while Semiconductor stocks saw a substantial outflow (-$2.62 billion).
Current active positioning shows that funds remain overweight Taiwan and South Korea, while underweight India and Australia. Sector-wise, the most overweight sectors are Semiconductors, Tech Hardware, and Discretionary Consumption, whereas Banks, Energy, and Diversified Financials are the most underweight.
Based on fund ownership ratios and active positioning combined with triple momentum, the report identifies specific stocks across four quadrants. "Crowded positive" targets include TSMC, MediaTek, BeiGene-ADR, WinWay Tech, and Taiwan Union. "Crowded negative" targets include Bharti (Airtel), Infosys, Hub24, NextDC, and Faraday Tech. The report also notes results for underweight-positive and underweight-negative screens, though specific tickers were not listed for those categories. All data is current as of April 30, 2026.
Key exhibits
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