Investing on Wall Street is very much like a game of musical chairs. Everything’s great as long as the music is playing, but you don’t want to be left standing when the music stops playing. Given this reality, it’s not too surprising that recent research by S&P Capital IQ shows that a number of major hedge funds have sold off large chunks of their positions in Apple Inc. (NASDAQ:AAPL) during the third quarter.
Apple being sold by hedge funds
The S&P Capital IQ report highlights that three of the top 10 U.S. hedge funds by equity holdings reduced their position in Apple, and two funds sold out, resulting in a $1.3 billion drop in Apple holdings according to the quarterly “13F fillings” of investment firms for the third quarter.
Electron Capital returned 3.1% for October, bringing its year-to-date return to 8.3%. The MSCI ACWI gained 6% for October, raising its year-to-date return to -22.3%, while the S&P 500 returned 8% in October for a year-to-date loss of 18.8%. The MSCI World Utilities Index was up 2.7% for October but remains down 13.5% year to Read More
However, the share sales by the hedge funds does not seem to have dented the technology giant’s share price, which notched an all-time of $115 on Monday afternoon.
Following Apple Inc. (NASDAQ:AAPL), Chinese Internet giant Baidu Inc (ADR) (NASDAQ:BIDU) was the second most-sold position, with four of the top 10 funds reducing positions representing a total of $921 million.
Energy and healthcare top sector buys for hedge funds in Q3
The report also noted that the energy and healthcare were the new hot sectors for hedge fund purchases, largely due to a number of merger and acquisition deals. Botox maker Allergan, Inc. (NYSE:AGN) (which accepted a $66 billion takeover bid on Monday from Actavis plc (NYSE:ACT)) was overtaken by AbbVie Inc (NYSE:ABBV) as the top buy, after the pharma firm spent months fighting a hostile bid by hedge fund titan Bill Ackman and Valeant Pharmaceuticals Intl Inc (NYSE:VRX).
AbbVie and Actavis are the most-bought pharmaceutical groups, with new positions totaling 1.9 billion and $1.5 billion respectively established in the third quarter..
Of note, six of the 10 biggest hedge funds own U.S. drug maker AbbVie Inc (NYSE:ABBV), while seven hold shares in Actavis plc (NYSE:ACT), making healthcare at $3.5 billion the second most-bought sector after energy.