Measuring the Crowded Trade in Global Equities: Technology remains among top crowded sectors globally

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Measuring the Crowded Trade in Global Equities: Technology remains among top crowded sectors globally

Measuring the Crowded Trade in Global Equities

24 July 2026 Citi Research

Background

Since the global financial crisis, quantitative investors have been concerned about

crowding of systematic investment strategies. Or more simply stated, is everyone

looking at the same factors and investing in the same stocks. While sympathetic to

the view, we would be much more worried if the entire investment community,

including fundamental and quant investors as well as hedge funds and multi-

strategy funds, were investing in the same theme or set of stocks. The tech bubble

in late 1990s, defensive positioning during the GFC period, and the chasing yields

and low-volatility stocks in early 2010s are a few obvious examples of extreme

crowding or consensus trades in the equity market. With the proliferation of hedge

funds and increased flows into ETFs and factor investing (including smart beta

indices), crowding has become an increasing concern among a broad range of

investors. We think that it’s timely and important to consider a systematic way to

measure crowding in the global equity market.

Over the last few years, we have developed a framework to evaluate crowdedness

in quantitative factors, based on their correlations with short interest, factor

valuation, inter-quantile correlation, and macro risk contribution. Looking to

extend this framework to quantify crowdedness at the stock level has its own set of

challenges with the lack of public information on investors’ holdings and much-

delayed (45+ days) 13F filings in U.S.

We have been considering other more timely market-based indicators to measure

crowding at the stock level. With more and more investors chasing the same set of