FANG Stocks Are Back in Favour
April 23 2019 - 7:05AM
Dow Jones News
By WSJ City
Wall Street's FANG gang is growing again.
Big money managers are again buying shares in Facebook, Amazon,
Netflix and Google parent Alphabet as the prospect of low interest
rates and a still-expanding US economy has pushed investors back
into what has been one of the bull market's most profitable
trades.
KEY FACTS
-- The FANG companies, as well as Apple and Microsoft, have gained $916.2bn
in market value so far this year.
-- That means they've nearly recouped the $945bn in losses those stocks
suffered in a fourth-quarter selloff.
-- Their increase has contributed heavily to the S&P 500's 16% gain this
year.
-- Fund managers surveyed by BAML said FANGs (along with their Chinese
equivalents) were the market's second most crowded trade.
-- Investors expect growth at many of those companies will continue to
outpace the broader market.
-- Results this week from Facebook, Amazon and others could confirm that
view.
Why This Matters
Fund managers say this year's trade is less congested, leaving
more room for further upside. Active fund managers had higher
allocations to FANGs last month than in Q4, but lower levels than
they've held over the past two years.
Not everyone is convinced. Morgan Stanley continues to suggest
that investors limit their exposure to technology and
consumer-discretionary stocks and is neutral on communications--all
sectors where FANG and other fast-growing companies reside.
Instead, analysts at the investment bank urge investors to take a
more defensive position in case economic growth in the US
stalls.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
April 23, 2019 06:50 ET (10:50 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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