The quarterly S&P Global Market Intelligence Hedge Fund Tracker is an aggregate analysis of hedge fund equity ownership that highlights hedge fund investments in specific stocks and sectors.
The Q4 Hedge Fund Tracker analysis finds that the top 10 hedge funds were hit hard by U.S. stock market performance in Q4. In total, the top funds managed approximately $159 billion in Q4, down $44 billion from Q3 2015. The funds also decreased the total number of stock positions held from 441 to 427, the fewest stock positions held throughout 2015. Financial stocks led the sell-off, with Lloyds Banking Group ranking as one of the most sold-off individual stocks of the quarter. The highest volume of buying occurred in the energy sector, with Pioneer Natural Resources ranking as the top energy buy among hedge funds.
"Our Quarterly Hedge Fund Tracker provides a valuable window into the seismic trends that are currently moving the markets," said Pavle Sabic, Head of Market Development, S&P Global Market Intelligence. "By consistently tracking hedge fund buying and selling activity in this manner, we seek to shed insight on market moves that may impact investors of every type."
Following is a summary of findings in the Q4 2015 Hedge Fund Tracker:
- Hedge Funds Buy Energy: The worst performing sector of 2015 in the S&P 500 was also the most-bought sector by pure play hedge funds in Q4. The 10 largest funds bought $1.5 billion in energy sector stocks during the quarter, with Pioneer Natural Resources and Williams Company ranking as the most-bought single stocks in the sector.
- Hedge Funds Sell Financials: The financials sector was the most-sold among hedge funds, with a total of $2.2 billion in net sells during Q4. The most-sold stock in the sector was Lloyds Banking Group.
- Five Most-Bought Stocks: The top 5 buys among hedge funds were American International Group ($2.5 billion), The Priceline Group ($1.6 billion), Valeant Pharmaceuticals ($1.3 billion), Teva Pharmaceuticals ($1.3 billion), and Apple ($1.2 billion). Priceline was also the most popular new position among the largest hedge funds with three funds taking significant positions in the company.
- Five Most-Sold Stocks: The top 5 sells among hedge funds were Allergan ($2.1 billion), Next Plc. ($1 billion), Walgreens Boots Alliance ($975 million), Lloyds Banking Group ($903 million), and Halliburton Company ($898 million).
Based on these trends among hedge fund managers, S&P Global Market Intelligence also produced a Trends & Ideas research note, which names specific ETFs that are weighted toward the stocks named in the 2015 Q4 Hedge Fund Tracker. The note also spotlights significant ETF inflows into the energy sector, with the three largest energy ETFs gathering $1.4 billion in new assets during the fourth quarter.
"Looking at ETF inflows and outflows through the lens of the largest hedge fund investors in the world, provides tremendous supporting evidence for current market sentiment," said Todd Rosenbluth, S&P Global Market Intelligence Director of ETF Research. "With both hedge fund and ETF investors signaling a pattern of buying in the energy sector, it will be important for all investors to watch that sector closely in the coming days and weeks.
Form 13F Reports are required to be filed within 45 days of the end of a calendar quarter by institutional investment managers with the U.S. Securities and Exchange Commission (SEC). An institutional investment manager is an entity that invests in, buys or sells securities for its own account, or a natural person or entity that exercises investment discretion over the account of any other natural person or entity. Only securities on the 13F list provided quarterly by the SEC (13F Securities) are required to be included in Form 13F Reports. Therefore, Form 13F Reports may not reflect the most current holdings of institutional investment managers because it is required that the 13F Report include only 13F Securities, is filed on a lag, and some funds may not meet the filing thresholds or other requirements. In addition, because the 13F Reports are as of the last date of the quarter, the 13F Report may not describe intra-quarter activity.