Every quarter, hedge funds must report their stock holdings to the U.S. Securities and Exchange Commission, and many investors pore over the lists from their favorite funds to get an idea about where to invest. However, it takes a significant amount of work to try to figure out which stocks are the most popular hedge fund positions.
As a result, we’ve compiled this list of stocks from data drawn up by Goldman Sachs for its fourth-quarter Hedge Fund Trend Monitor. The stocks on this list are those that appear most often among the top 10 holdings within hedge fund portfolios.
Q4 2021 hedge fund letters, conferences and more
Beware Following This List Right Now
Goldman limited its universe to hedge funds with 100 to 200 distinct equity positions to separate funds that invest based on fundamentals from those that choose positions quantitatively. While many investors study the 13Fs of their favorite funds after every quarter in an attempt to follow the so-called "smart money," this technique hasn't worked over the last year or so.
Goldman's basket of the top 50 most popular stocks among hedge funds during the fourth quarter of 2021 has outperformed the S&P 500 in more than half of quarters over the last 20 years. However, these stocks have historically been highly volatile, which means they may not be right for all investors.
In 2021, the top 50 stocks lagged the S&P 500 by 17 percentage points, marking its worst stretch of underperformance ever recorded. Additionally, the list isn't sector-neutral to the S&P 500 and doesn't include any consumer staples stocks. Information technology makes up one-third of the top 50 positions.
The Top 10 Most Popular Stocks Among Hedge Funds In 4Q21
To make things simpler, we have narrowed Goldman's list of the top 50 stocks to cover just the top 10 most popular stocks among hedge funds during the fourth quarter of 2021. We should note that of the stocks on this list, those in the financial sector have generally held up better than tech firms, despite hedge funds' refusal to unload more of their tech holdings. This is likely one reason hedge funds struggled during the fourth quarter.
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Wells Fargo
Wells Fargo & Co (NYSE: WFC is up by about 2% year to date and 30% over the last 12 months. During the fourth quarter, 38 hedge funds owned the stock, and 22 had it as one of their top 10 names. The average portfolio weight among hedge funds that have Wells Fargo as one of their top 10 positions was 6%, and hedge funds owned 1% of the bank's equity cap. The bank has had its ups and downs this year, just like the rest of the market. It was up by about 18% for the year as of early February.
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Visa
Visa Inc (NYSE:V) is down by about 5% year to date and down by more than 6% over the last 12 months. During the fourth quarter, 63 hedge funds owned the stock, and 25 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had the credit card company as one of their top 10 stocks was 6%, and hedge funds owned about 3% of its equity cap.
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Mastercard
Mastercard Inc (NYSE:MA) is down by about 7% year to date and down by almost 10% over the last 12 months. During the fourth quarter, 69 hedge funds owned shares of the credit card company, while 25 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Mastercard as one of their top 10 holdings was 9%, and hedge funds owned about 3% of its equity cap.
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Micron Technology
Micron Technology, Inc. (NASDAQ:MU) is down by about 19% year to date and down by about 15% over the last 12 months. During the fourth quarter, 43 hedge funds owned shares of the chipmaker, while 27 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Micron as one of their top 10 holdings was 8%, and hedge funds owned 4% of the company's equity cap.
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Uber Technologies
Uber Technologies Inc (NYSE:UBER) is down by about 28% year to date and down by more than 46% over the last 12 months. During the fourth quarter, 83 hedge funds owned shares of the ride-sharing company, while 31 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Uber as one of their top 10 holdings was 7%, and hedge funds owned 12% of the company's equity cap. Like many tech firms, Uber has had a tremendously difficult year on the stock market.
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Apple
Apple Inc (NASDAQ:AAPL) is down by about 14% year to date but up by about 25% over the last 12 months, making it a standout among tech firms. During the fourth quarter, 64 hedge funds owned shares of the iPhone maker, while 32 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Apple as one of their top 10 holdings was 7%, and hedge funds owned about 0% of its equity cap.
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Meta Platforms
Facebook parent Meta Platforms Inc (NASDAQ:FB) has plunged more than 40% year to date and is down by about 29% over the last 12 months. During the fourth quarter, 122 hedge funds owned shares of the social media giant, while 54 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Meta shares as one of their top 10 holdings was 6%, and hedge funds owned 3% of the company's equity cap.
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Alphabet
Class A shares of Google parent Alphabet Inc (NASDAQ:GOOGL) have fallen about 10% year to date but are up by about 26% over the last 12 months. During the fourth quarter, 106 hedge funds owned shares of the tech giant, while 62 had it as one of their top 10 holdings. The average portfolio weight among hedge funds with Alphabet as a top 10 holding was 7%, and hedge funds owned 2% of its equity cap.
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Amazon
Amazon.com, Inc. (NASDAQ:AMZN) shares are down by more than 12% year to date but off only about 3% over the last 12 months. During the fourth quarter, 150 hedge funds owned shares of the e-commerce and tech giant, while 88 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Amazon as a top 10 holding was 7%, and hedge funds owned 2% of its equity cap.
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Microsoft
Microsoft Corporation (NASDAQ:MSFT) shares are down by about 14% year to date but up more than 21% over the last 12 months. During the fourth quarter, 147 hedge funds owned shares of the software giant, while 90 had it as one of their top 10 holdings. The average portfolio weight among hedge funds that had Microsoft as one of their top 10 holdings was 6%, and hedge funds owned 1% of its equity cap.
