U.S. hedge funds bet on retail, tech in second quarter as economy sizzled
Prominent hedge fund managers appeared to make big second-quarter bets that the U.S. economy would continue to expand despite increasing concerns about a broadening trade dispute between the U.S. and China, regulatory filings showed Tuesday.
Third Point added new positions in payment companies PayPal Holding Inc
Activist fund Jana Partners added shares of broad-based exchange-traded funds that track the S&P 500 and the Russell 2000 indexes and took new positions in Wells Fargo & Co
The flurry of new positions in cyclical companies came during a quarter in which U.S. gross domestic product increased at an annual rate of 4.1 percent, nearly double the 2.2 percent rate of first quarter of the year, according to Commerce Department estimates.
A rally in cyclical companies would help boost hedge fund industry returns at a time when many fund firms are under pressure from investors to lower their fees or improve their performance. Hedge funds, on average, are up 1.5 percent since the start of January, according to research firm Hedge Fund Research, well behind the 6.2 percent gain in the benchmark S&P 500 index over the same time.
"Everyone is comparing everything to the S&P 500 and that`s a very difficult hurdle for the last few years," said Sol Waksman, president of research firm BarclayHedge.
Quarterly disclosures of hedge fund managers’ stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are one of the few public ways of learning what the managers are selling and buying. But relying on the filings to develop an investment strategy comes with some risk because the disclosures come 45 days after the end of each quarter and may not reflect current positions. Still, the filings offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side.
The filings do not disclose short positions, or bets that a stock will fall in price. As a result, the public filings do not always present a complete picture of a management firm`s stock holdings.TRIMMING THE FAANGS
Large hedge fund managers cut their positions in some of the so-called FAANG stocks - the moniker given to Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc, and Google-parent Alphabet Inc - that led the market higher last year.
Third Point sold all of its stake in Alphabet Inc
Omega Advisors, meanwhile, sold all of its position in Netflix
Einhorn sliced his bet on Apple
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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