YWR: Hedge Fund Holdings Analysis
Time to review the data on hedge fund equity holdings. We like to know what’s consensus and how hedge positioning is changing through time. The data isn’t perfect, as it doesn't show any associated hedging overlays, and is less consistent for international markets, but it’s still worth reviewing.
Let’s not jinx it, but the hedge fund industry is having a great year! The overall industry is +10.5% YTD through October, vs the S&P +14%. L/S Equity is +14% and Multi-strat is cranking out another 10% year. Global macro is up almost 10% too. Credit +6%. The only struggling style is CTA’s.
Top 21 Most Consensus Hedge Fund Holdings
Next we cycle through the Top 20 holdings for 429 hedge funds with equity positions greater than $1bn to see which names show up the most. We call it the Top ‘21’ because usually both shares of Alphabet show up.
The full dataset with the Top 20 positions for over 1,500 hedge funds is available at the bottom of the post.
As usual, Amazon and Microsoft battle it out for the #1 and #2 the most consensus positions.
Nvidia has really come up the rankings with 119 funds showing it as a Top 20 position, versus 60 in June 2024.
We’ve commented before on the heavy semiconductor exposure with Nvidia, TSMC, Broadcom, Micron, and AMD as top positions.
Western Digital is new and along with Micron shows hedge funds getting on board the bull market in memory.
I’m surprised AppLovin has become a top 21 stock. but it’s an example of a business pivoting their model to AI.
I’m surprised no Chinese ADR’s make the list.
Quick Pub Quiz: Name two big cap AI tech stocks hedge funds don’t own.
Palantir
Oracle
Below are the Top 21 hedge fund stocks from January 8, 2024.
You can see the top holdings don’t change much although Adobe and Salesforce are out and considered AI losers now. UnitedHealth was a train smash, but might be interesting now. It’s surprising Uber out and Alibaba are out because they’ve both done well.
Most Consensus Hedge Funds
I like to see which funds have the biggest overlap between their Top 20 and our Top 21 Most Consensus positions. Effectively, which funds are the most consensus.
Kintegral and Voleon are new to the top consensus fund list and have pushed down Marshall Wace.
It’s kind of funny, Voleon says they use cutting edge machine learning technology.
The Voleon Group is committed to the development and deployment of cutting-edge technologies in investment management. Our innovations in machine learning serve as the cornerstone for our success in applying rigorous data-driven techniques to financial markets.
But they never look around to realise they are doing the same thing as everyone else and are one of the most consensus funds in the world.
Consensus-Size Correlation
As in previous months the correlation between hedge fund size and consensusness remains. The bigger you get the more you do the same thing as everyone else. The y axis is hedge fund size in $mn, while the x axis is how many of their Top 20 positions are in our Top 21 Most Consensus list.
We also do the reverse and identify which funds have 0 overlap between their Top 20 and the Top 21 Most Consensus.
Hedge Fund of the Month
In Hong Kong I presented a controversial presentation titled $200 oil pops the bubble.
It’s a super non-consensus view, but I wanted to scroll through the hedge fund data and see if any of the big funds are positioned for this. Does anyone share my view?
Turns out one fund does. And it’s one of the all time greats.
Our Hedge Fund of the Month is Elliot Investment Management.
I love it. Right out of the gate they have a gold royalty company as their #1 position. Then in energy they have Phillips 66, Suncor, Subsea7, and SeaDrill.
Elliot is highly involved in Phillips 66 and published their Streamline66 presentation on how PSX gets to $200/share. I own it too, but have owned it forever.
Subsea7 is also notable because they are merging with Saipem (Learning to love Saipem again) to create a duopoly in deepwater construction.
Interestingly, someone pitched Sensata in HK.
Below is the full dataset so you can scroll through all of your favorite funds and see their Top 20.