These Three Hedge Fund Managers Returned The Most From Their Stock Picks In May by Alpha Attribution
What happens when you pick a fantasy hedge fund team? In May, it was like bringing sabermetrics to the old-school scouts lamented by Billy Beane in Moneyball. You outperformed, and you made it look easy.
While the S&P 500 was up 105 basis points for the month, an equal weighted portfolio of the Symmetric Top Twenty managers returned 283 basis points. Some seventeen of the managers in the top twenty outperformed the SPY in May, with the top three performances coming in from Broadfin, Steadfast, and Scopia, according to their publicly disclosed long positions. On a fully hedged, market, beta and sector neutral basis, the StockAlpha return for the Symmetric Top Twenty stock-pickers was 134 basis points.
Symmetric Top Twenty Stock Pickers – May Performance
The aggregate portfolio’s exposure to Valeant contributed the most to the overall return. Some 16% of managers in the hedge fund universe hold the position, but 35% of managers in the Symmetric Top Twenty owned it. VRX contributed sixty-eight basis points to the overall portfolio’s performance for the month. The next two largest contributors were Spirit Aerosystems Holdings Inc (SPR) and Tableau Software (DATA), which contributed fourteen basis points each. These positions were only shared by two managers, each, within the Symmetric Top Twenty.
Returns Attribution
Position Overlap
The aggregate portfolio’s exposure to Canadian Pacific Railways (CP) drew down the most against the aggregate portfolio for May. Followed by Workday Inc (WDAY) and MIcrosoft, these positions detracted fourteen, ten and seven basis points, respectively – thirty-one basis points in all.
The Symmetric Top Twenty stock pickers outperformed the S&P500 on an absolute and fully hedged basis. Aside from VRX, the key contributors to the group’s performance did not overlap with more than two managers, and only thirty-four of three-hundred positions in the aggregate portfolio are shared by more than two managers in the Symmetric Top Twenty. Managers selected by their ability to produce consistent StockAlpha finished May strong.
