A group of widely owned stocks may be at risk of falling even further as investors unwind their exposure to equities amid increased volatility this year.
In a note to clients Monday, analysts at Credit Suisse advised clients to sell highly concentrated names given expensive valuations, deteriorating trends and the risk of a snowball type of effect if the selling continues.
"If the growth trade has peaked, heavily owned names — and those with particularly high growth expectations — may be most vulnerable to rotation away," wrote Lori Calvasina, U.S. equity strategist at Credit Suisse.
According to the report, there's "ample evidence" of investors crowding into momentum and growth names, particularly among FANG stocks (Facebook, Apple, Netflix, Google), pharma, biotech, health-care equipment, software and services, among others.
Since reaching a record price in May, the S&P 500 has lost 11 percent of its value while stocks like Apple and Netflix have plunged 25 percent from their respective highs.
Below is a chart showing how many large-cap funds own the FANG stocks and their performance this year.