Meaning:
Literally translated as “to huddle together,” this term describes a group of people staying close together to keep warm, especially during cold winters. It’s often used as a metaphor for “cooperating closely and working as a group to fight against difficulty.” Nowadays, Chinese people use the term to describe the phenomenon that institutional investors, such as mutual funds, tend to invest in the same cluster of stocks, that are often the leaders in certain sectors such as Internet and social media, consumer goods and new energy cars.
Example:
A: 为什么机构喜欢抱团？
Wèishénme jīgòu xǐhuan bàotuán？
Why do institutional investors like to invest in the same cluster of stocks?
B: 因为市场优质公司较少，机构的资金庞大，所以只好选择投资大市值的龙头公司。
Yīnwèi shìchǎng yōuzhì gōngsī jiào shǎo，jīgòu de zījīn pángdà，suǒyǐ zhīhǎo xuǎnzé tóuzī dà shìzhí de lóngtóu gōngsī。
Because there are few good companies in the market, and when institutions have a huge amount of money to spend, they are left with no other choice but to invest in the leading companies with large market values.