Hedge Funds Continue To Shed Equity Positions In Q2, S&P Global Market Intelligence Quarterly Hedge Fund Tracker Finds – Top Funds Sell Off Apple Stock Yet Again via S&P Capital IQ
Top Funds Sell Off Apple Stock Yet Again, but Warm Up to Charter Communications, Morgan Stanley
New York (August 17, 2016) –S&P Global Market Intelligence, a leading provider of multi-asset class research data and insights, today released its review of Q2 2016 13F filings by pure play hedge funds. 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 latest Hedge Fund Tracker analysis shows the top funds managed approximately $150 billion in equity holdings, up from the $141 billion under management in Q1. These funds also decreased the number of positions to 399 in Q2 from 408 in Q1, breaking last quarter’s record as the fewest stock positions held since S&P Global Market Intelligence began tracking this data in 2014. Information technology and healthcare sectors were the biggest net sells for the top ten hedge funds.
“Like other market participants, hedge funds were at the whim of the broader market and economy these last few months,” said Pavle Sabic, Head of Market Development, S&P Global Market Intelligence. “In the first quarter, we saw substantial net selling of nine out of ten S&P 500 sectors. Confidence improved somewhat in the second quarter, but only up to a point. We understand what the ‘smart money’ is buying and selling, but there’s no sense of direction.”
Following is a summary of findings in the Q2 2016 Hedge Fund Tracker:
- Increase in AUM, Decrease in Positions: Top hedge funds now manage $150 billion, up from $141 billion in Q1, but still down from the $159 billion seen in Q4 2015. Part of this might be due to a market correction, but the number of positions decreased to 399 in Q2 from 408 in Q1, on top of a decline from Q4 2015’s 427 positions.
- Slightly More Confidence but Nothing to Celebrate: Compared to Q1’s selling of 9/10 sectors, things are a little better as 6/10 sectors are net buys in Q2. Consumer discretionary (+$1.5 billion) and energy (+$1.2 billion) lead the way.
- The Dark Horse Returns: With consumer discretionary being the most bought sector in Q2, one stock stands out: Charter Communications with ($1.2 billion) in buys. Four out of the top 10 hedge funds bought shares of this consumer discretionary cables services company, in which three of the four hedge funds established new positions.
- Five Biggest Buys: Besides Charter Communications, the top funds bought Morgan Stanley ($993 million), Adidas ($921 million), Allergan ($841 million), and Shire ($821 million)
- Five Biggest Sells: Like in Q1 2016, Apple stock was the most sold off amongst the biggest hedge funds with $5.3 billion of its stock shed. Next came Netflix ($1.9 billion), Allergan ($1.5 billion), Microsoft ($1.4 billion), and Alphabet ($761 billion)
- Apple Not In Favor: To put hedge funds shedding $5.3 billion of Apple in perspective, info tech as a whole saw net sell offs of $6.3 billion. That’s about 84%. This could be due to hedge funds trying to lock in gains for their investors as Apple had a rally in the last few months
S&P Global Market Intelligence analyzes the latest quarterly 13F filings* to determine the top ten largest hedge funds based on reported equity assets. Further analysis isolates the universe to pure-play hedge funds that focus on stock picks and hones that universe further to isolate the hedge funds that overweight their biggest investments by capping the number of stocks held at 100. S&P Global Market Intelligence performs this research quarterly in order to understand what the most prominent hedge funds are buying, holding and selling. The firm develops the analysis through an examination of both industry filings as well as Excel-based holding models, allowing clients to quickly spot global trends in asset category and understand what some of the largest investors buying, selling and holding.
S&P Global Market Intelligence also provides rankings on approximately 1,100 equity and fixed income ETFs based on performance, risk and cost factors, including holdings-level analysis and expenses.
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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.