Has Apple Become A 'Crowded Trade?'

Investors have lapped up Apple Inc. (NASDAQ: AAPL) shares in droves over the last couple of months, even though skeptics have questioned the move in the stock price. Brian Belski from BMO Capital Markets was on CNBC recently to discuss if Apple is a "crowded trade." He also discussed the causes of the recent volatility in the markets.

Paring Up Gains

"You have institutional investors paring back gains where they have high tracking error," Belski said. "It's very clear that most institutional investors around the world have a very high tracking error in areas like biotech. Right? They have been depending upon the biotech area for returns over the last 12 months."

Related Link: Biotech Stocks Soar Amid Positive News

He continued, "Then over the last five years, healthcare in the S&P 500 is hitting all-time highs with respect to relative performance. So, healthcare is a crowded space. So, what you have seen is as volatility increases – which is part of our call on the short-term basis with respect to 2015 – as volatility increases, investors are going to pare back their gains as some of these fears elevate on the short-term basis."

Not As Crowded

Belski was asked if he will call Apple a "crowded trade." He replied, "Well, Apple is interesting because Apple, we think, is kind of microcosm for the United States stock market, right? Meaning, it continues to go up and people continue to doubt [...] Remember in 2013, Apple was used as a redemption tool by many firms.

"The second half of 2014, that's when investors started to get back in again in Apple. Now, they are fully invested. So, Apple is not as crowded, I would say, as biotech."