The Darlings of Active Managers: Most Crowded Trades

The “darlings” of mutual funds and institutional funds is a popularity contest tracked by Credit Suisse that might be almost used as a contrarian indicator, in a note titled The Darlings of Active Managers The Most Crowded Names in US Small, Mid & Large Cap Funds . As a general rule, the report authors note, “owning too many darlings given less opportunity for differentiation.”

Large cap darlings underperformed while "Cherished Cousins" delivered

Following darlings in large caps has not been a profitable strategy, the report noted, as twenty five of the most popular stocks are trading below...