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After epic run, the tech 'FAANG' trade is no longer Wall Street's favorite

Key Points
  • The once-beloved "FAANG" trade has fallen out of investors' favor, according to the latest Bank of America Fund Manager Survey.
  • Now the U.S. dollar is the most crowded trade, the survey shows.
The day's final numbers are displayed on a monitor on the floor of the New York Stock Exchange (NYSE) at the closing bell, November 19, 2018 in New York City. Technology stocks continued to plunge on Monday, with Facebook and Apple down again as the Dow Jones Industrial average dropped nearly 400 points on the day.
Drew Angerer | Getty Images

Shares of technology giants have fallen out of favor with fund managers, replaced by bets on the U.S. dollar as the most crowded trade.

The so-called "FAANG + BAT" stocks, including Facebook, Amazon, Apple, Netflix, Google's Alphabet, along with Baidu, Alibaba, Tencent, had been the most crowded trade since February, according to the latest monthly Bank of America Merrill Lynch Fund Manager Survey. But now, the dollar has become fund managers' number one trade.

Over the past three months, Apple shares have plunged more than 20 percent, while Facebook shares have fallen 13 percent. Amazon shares also have fallen since the company reached a $1 trillion valuation earlier this year. Shares of the e-commerce giant are down 22 percent in the last three months, bringing the company's valuation back down to $744 billion, but share prices are still up more than 30 percent in 2018.

The greenback, in the meantime, has strengthened on the back of solid U.S. data including strong consumer spending. The safe-haven buying amid the recent stock rout and increased volatility has also pushed the dollar higher. It reached an 18-month high last week.

FAANG is still the second most-crowded trade, followed by bets against emerging markets, the survey showed.

The survey took place from Dec. 7 to 13. It included responses from 243 investors who collectively have nearly $700 billion under management.

Bank of America Merrill Lynch also released it survey of fund managers on Tuesday. It found that investors are fleeing stocks and buying bonds in record numbers amid the global sell-off in equities.