Investors who want to beat the market face a daunting task by buying stocks that everyone else owns already.

These so-called “crowded trades” likely have faced the intense scrutiny of fund managers, making the share price a perfect indication of what the market thinks about the company’s value.

Crowded trades also have a history of underperformance, according to analysts at investment bank Credit Suisse. They compiled a list of stocks that are very popular among actively managed funds, excluding hedge funds, quant funds, exchange-traded funds and index funds.

“We recommend against owning too many of these names due to: less opportunity for differentiation, underperformance over the life of our study and heightened risk of underperformance if news flow turns negative, and ongoing outflows from actively managed funds as the shift into passive continues,” analysts led by Lori Calvasina, chief U.S. equity strategist at Credit Suisse, said in a January 4 report.

Her study lists hundreds of stocks by market value and investment style. Here is a list of the 25 biggest companies that are most popular among actively managed funds:
 

1. Microsoft Corp. (MSFT)
2. Apple Inc. (AAPL)
3. Alphabet Inc. (GOOGL)
4. JPMorgan Chase & Co. (JPM)
5. Johnson & Johnson (JNJ)
6. Facebook Inc. (FB)
7. Wells Fargo & Co. (WFC)
8. Home Depot Inc. (HD)
9. Visa Inc. (V)
10. Comcast Corp. (CMCSA)
11. Merck & Co. (MRK)
12. Amazon.com Inc. (AMZN)
13. Cisco Systems Inc. (CSCO)
14. Pfizer Inc. (PFE)
15. Pepsico Inc. (PEP)
16. Verizon Communications (VZ)
17. CVS Health Group (CVS)
18. UnitedHealth Group Inc. (UNH)
19. Exxon Mobil Corp. (XOM)
20. Chevron Corp. (CVX)
21. General Electric Co. (GE)
22. Schlumberger Ltd. (SLB)
23. Gilead Sciences Inc. (GILD)
24. Honeywell International (HON)
25. Amgen Inc. (AMGN)

Source: Credit Suisse US Equity Strategy

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