Here are the 10 stocks that large-cap money managers are getting most excited about right now, according to UBS
- After a dominant 14-month-long stretch for growth stocks, some money managers see a shift coming.
- Fund managers are overweight stocks in cyclical sectors like industrials relative to the S&P 500.
- Here are 10 stocks that large-cap portfolio managers are increasingly excited about.
Professional investors are increasingly skeptical about the stock market's favorite stocks.
Large-cap fund managers are starting to shy away from several of the biggest companies in the S&P 500, according to a recent report from UBS. Sentiment for mega-cap technology firms like Microsoft (MSFT), Alphabet (GOOGL), and Apple (AAPL) is souring fastest, the firm found.
By bailing on those three names and top performers like Nvidia (NVDA), money managers are swimming against the tide. Large growth stocks have carried the market higher in the last year, so shifting away from them now suggests that yesterday's laggards can be tomorrow's leaders.
If that bet is premature or off-base entirely, active managers will almost certainly trail the market. But in an ocean of mutual funds, successfully picking unheralded stocks is a good way to stand out. That's why large-cap stock-pickers tend to fade the biggest companies, according to UBS.
Compared to the S&P 500, large-cap portfolio managers have the smallest weightings in Apple, Nvidia, and Tesla (TSLA), UBS strategists led by Patrick Palfrey wrote in a late February note.
10 stocks that fund managers love
By contrast, fund managers' largest relative overweight positions are in sectors like industrials, financials, healthcare, and materials, Palfrey noted.
However, there are serious splits within those groups. For example, smart-money investors think firms in industries like financial services, insurance, healthcare equipment, and healthcare service will outperform but are underweight banks, biotechnology, and pharmaceuticals.
Below are the 10 companies that are seeing the biggest improvements in sentiment from large-cap fund managers, as measured by the net number of funds adding positions to them. Along with each is its ticker, market capitalization, and sector.