When 80% of the world’s professional money managers agree on something, it’s worth paying attention. According to Bank of America’s latest global fund manager survey, released June 16, that consensus view is simple: semiconductors are the most crowded long position in risk assets right now.
The timing is telling. The Philadelphia Semiconductor Index, better known as SOX, just hit all-time highs, including a 5% surge in a single session leading up to the survey. The iShares Semiconductor ETF (SMH) is up 99% year-to-date. Nearly doubled. In six months.
The crowded trade problem
Eight out of ten respondents in Bank of America’s survey described the semiconductor trade as crowded. That’s not a mild consensus. That’s near-unanimity among institutional investors managing enormous pools of capital.
The phrase “fear of heights” keeps surfacing in the findings. Fund managers aren’t necessarily bearish on chips. They’re just looking down from the ledge and getting vertigo.
