YWR: How Consensus is your Hedge Fund?
There are two monthly traditions at YWR; the Global Factor Model and How Consensus is Your Hedge Fund?
Today we analyse the Top 20 holdings of 325 global funds (with AUM > $1bn) as of March 6, 2024.
We then cycle through the holdings and count which ones show up the most often. Alphabet has 2 share classes, so we count the Top 21 (instead of the Top 20).
Top 21 Most Consensus positions from Hedge Fund Top 20 holdings.
Amazon and MSFT are still the top 2 most consensus positions, but the number of funds where they show up as a Top 20 position has increased from Jan 31st. 98 funds have both Amazon and Microsoft as a Top 20 position.
Meta (68 funds), Nvidia (57) and Alphabet (57) are still #’s 3,4,5.
If we assume no fund would own two different share classes of Alphabet at the same time it would be the #3 position with 95 funds holding it.
Lots of semis (TSMC & AMD). Micron is new.
JP Morgan is out. Berkshire is in.
GE is a Top 20 position. Everyone must be following TCI.
No autos, no tire companies, no banks, no life insurance companies. No miners. No gold. No China. And one energy company, only because it is an M&A target.
2024 might be a tough year for hedge funds.
Last month’s Top 21 List
Splunk (SPLK:$26bn) is new to me, but appears to be software for running a tech company’s Security Operations Center (SOC).
Similar to last month, Millennium and Hudson Bay win the Most Consensus Hedge Fund award for the most overlap of their Top 20 positions with our Top 21 list. They both own 12 of the Top 21.
Walleye is another consistent Top 3 medalist for consensusness.
In the boxplot below you see how quite extraordinary it is to own 12 of the Top 21. The vast majority of hedge funds in our list only manage 2-4.
Below are the Top 30 Most Consensus Hedge Funds sorted by size. Apparently, the bigger you get the more consensus you become. Consensus hedge funds have an average equity assets of $26bn. In contrast Non-Consensus hedge funds have equity assets of $4.3bn.
So what do the Non-Consensus funds own?
Methodology: We take all the funds with 0 overlap of their Top 20 positions with our YWR Top 21 list.
We then cycle through their holdings and build a Top 40 list from these ‘Non-Consensus funds’
Top 40 Non-Consensus Positions.
The names in this list change a lot month to month, but there is a big increase in biotech (6 of the top 10). I think we are all interested in the underperformance of biotech and wondering if it could be a 2nd derivative AI play. The
has done some work on how to invest in biotech.Japanese banks made the list (Mitsubishi and Sumitomo). They’ve had a great move.
Last month’s Top 40 Non-Consensus positions.
Would you like to look at the results fund by fund?
Maybe see what Stevie likes? One of our favorite auto stocks is a top position. Guess which one.
Below is the link to the full Top 20 Holdings Data for each fund.