The 9th edition of the Hedge Fund Tracker identified that Healthcare investing by Hedge Funds continues to be buoyant for the second straight quarter, while Info Tech is falling out of favor. See full report here.
Overall Commentary & Findings
- Most Bought Sector: Healthcare continues its run as the biggest buy sector for the Hedge Fund Tracker with $7.2 billion of aggregate buying this quarter. In Q1, it was also the most bought sector with $4.8 billion, so a notable increase
- Baxter Is This Quarters Most Bought Stock: Baxter International contributes most to the popularity of the Healthcare sector by hedge funds. Third Point purchased $1.9 billion, which is now nearly 18% of its portfolio.
- Info Tech Most Sold Sector: Info Tech had the biggest sell off with $3.1 billion. Again this trend continues from Q1 as Info Tech was also the top sell off sector in Q1 with $942 million
- Baidu Is This Quarters Most Sold Stock: Baidu, Info Tech, contributed to the sector sell as the most sold stock with $1.3 billion. Lone Pine sold out completely
- Notable New Positions in Amazon and Rolls Royce: Viking and Tiger Global took new positions in Amazon with $952 million and $311 million respectively. ValueAct took a new position worth $1.2 billion in Rolls Royce Holdings
- Notable Exits: Baidu, $235 million by Viking Global, Mondelez International $938 million sold out by Viking, Apple $874 million by Lone Pine, Micro Technology $830 million by Viking and Icahn Capital Netflix $823 million
Top 5 Bought Stocks
- Baxter International, $1.9 billion: purchased by hedge fund Third Point
- JD.Com, $1.8 billion: Tiger Global Management increasing their position by $1.67 billion (its now 36% of their entire portfolio) and Lone Pine by $114 million
- Valeant Pharmaceuticals, $1.7 billion: Paulson & Co increasing their position by $1.5 billion and Viking Global Investors increased by $124 million
- Netflix, $1.4 billion: purchased by Tiger Global increasing their position by $1.4 billion
- Amazon, $1.3 billion: Viking and Tiger Global took new positions in the stock with $952 million and $311 respectively
Top 5 Sold Stocks
- Baidu, $1.3 billion: Lone Pine was the largest seller, selling out its $1 billion stake
- Valeant Pharmaceuticals, $1 billion: ValueAct decreasing existing position by $972 million
- Mondelez International, $938 million: as a result of Viking selling out its position
- Apple, $874 million: as a result of Lone Pine selling out its position
- Micro Technology, $830 million: as a result of Viking selling out its position
While stocks are typically the major positions of hedge funds, managers have long been able to easily participate in certain investment styles via liquid low-cost ETFs. For example, Paulson & Company reduced its stake in SPDR Gold Shares (GLD) by $177 million during the second quarter with the sale of one million shares. In the second quarter, GLD had $976 million in outflows. Despite the sale, Paulson held nine million shares of GLD. To find out more please read Todd Rosenbluth’s blog.
Selection criteria- S&P Capital IQ® analyzes the latest quarterly 13F filings to determine the largest hedge funds based on reported equity assets. Further analysis isolates the universe to what S&P Capital IQ believes are pure-play hedge funds that focus on stock picks. The final criteria is to select the hedge funds that have a 100 or less positions in order to focus on the biggest bets and overweight positions. No short positions are taken into consideration.