Investing.com -- Despite recent market volatility and broad declines in major indices, technology stocks remain the most crowded sector in the U.S., Citi analysts said in a new note focused on sector crowding trends.
"Technology stocks were the most crowded (market cap basis) through the middle of February across the US, Europe and Asia ex JP, but have since declined to second place in Europe and Asia," Citi noted.
"This still leaves Tech at the top of the crowding ranks in the US, but it is more concentrated among the larger companies."
Crowding refers to the extent to which investors have concentrated their holdings in particular sectors or stocks, which can leave those assets vulnerable to sharp corrections if sentiment shifts.
Globally, Citi observed that "sector crowding trends across regions held steady so far since last month, despite the volatility and large index level declines."
The bank noted the crowding trend remains "delineated between Cyclicals on one end (crowded) and Defensive on the other," with Financials emerging as the most crowded sector in Europe.
In contrast, "Defensive Utilities and Consumer Staples are no longer extremely under-crowded in Europe, while Real Estate has seen its crowding increase," Citi said.
Factor crowding is said to have remained mostly stable across regions. However, in Japan, "the most crowded quant style changed from Earnings Momentum to Price Momentum."
