HFs exit consumer discretionary sector in Q2

August, 2017

S&P Global Market Intelligence has released its review of Q2 2017 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 analysis shows the top funds managed approximately $154 billion in equity holdings, down slightly from the $157 billion under management in Q1 2017. The total number of equity positions held also fell slightly from 427 in Q1 to 423 in Q2, as hedge funds made a significant exit from the consumer discretionary sector.
“Though overall equity holdings held relatively steady from Q1 to Q2, the investment mix shifted considerably among top hedge funds who were net sellers in 6 out of the 11 sectors of the S&P 500,” said Pavle Sabic, Head of Market Development, S&P Global Market Intelligence. “We also see a great deal of divergence in strategy among top funds, evidenced by the fact that Microsoft is both the most bought single stock among top funds and the third-most sold single stock among top funds.”
Following is a summary of findings in the Q2 2017 Hedge Fund Tracker:

  • Top Funds Exit Consumer Discretionary: Hedge funds sold $3 billion in consumer discretionary stock in Q2, led by $1 billion in sales of Nike stock. The healthcare sector saw $1.4 billion in sales among top hedge funds and the information technology sector saw $1.1 billion in sales by large funds.
  • Microsoft Sparks Divergence Among Hedge Fund Buyers and Sellers in Tech Sector: Within the technology sector, Facebook was the most-sold single stock with $1.5 billion in sales during Q2, followed by Microsoft ($1.5 billion), Apple ($1.2 billion), and Alphabet ($1.1 billion). However, Microsoft was also the top buy among large hedge funds, with $1.3 billion in new investment during the quarter.
  • Biggest Buys: Hedge funds bought 18.1 million shares of Microsoft stock in Q2, for a total investment of $1.3 billion. Other stocks receiving attention from hedge fund buyers were NXP Semiconductors ($1.2 billion), Baker Hughes ($1.1 billion), O’Reilly Automotive ($697 million), and Wells Fargo & Company ($659 million).
  • Biggest Sells: Hedge funds sold 9.8 million shares of Facebook stock in Q2, totaling $1.5 billion. Other stocks seeing the largest sell-off among hedge funds were Humana ($1.3 billion), Microsoft ($1.2 billion), Alphabet ($1.1 billion), and PayPal ($1.1 billion)

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.