Hedge Funds Shed Equity Holdings in Q3 S&P Capital IQ® Quarterly Hedge Fund Tracker
Amazon Sees Heaviest Volume of New Buying Among Large Funds
S&P Capital IQ® + SNL Financial, a leading provider of multi-asset class research data and insights, today released its review of Q3 2015 13F filings by pure play hedge funds. The quarterly S&P Capital IQ Hedge Fund Tracker is an aggregate analysis of hedge fund equity ownership that spotlights hedge fund investments in specific stocks and sectors. As a complement to the quarterly report, S&P Capital IQ also produced a Trends & Ideas research note which calls out ETFs that give investors exposure to hedge fund buying and selling trends.
The Q3 Hedge Fund Tracker analysis finds that the top 10 hedge funds heavily sold-off their equity holdings. In Q3, the top funds managed approximately $191 billion in equity assets, down $9 billion from Q2. This decline in equity holdings reflects the market drop that occurred over the third quarter and an aggregate decline in overall equity holdings. Top funds held a total of 441 different stock positions in Q3, down from 471 in Q2. Tech sector stocks led the sell-off, with eBay earning the distinction of most-sold stock among the top ten pure play hedge funds. The top buy among hedge funds was Amazon.
“With their enormous volume of assets under management, the largest pure play hedge funds serve as a microcosm for patterns of buying and selling that may have far-reaching ramifications for global markets,” said Pavle Sabic, Financial Risk Manager, S&P Capital IQ. “By consistently tracking hedge fund buying and selling activity in this manner, we seek to take the pulse of this vital segment of the marketplace to give investors the insights they need to make better decisions.”
Based on these trends among hedge fund managers, S&P Capital IQ also produced a Trends & Ideas research note which names specific ETFs that are weighted toward the stocks named in the 2015 Q3 Hedge Fund Tracker. The note also spotlights significant hedge fund outflows in two emerging market ETFs, the Vanguard Emerging Markets (VWO) and iShares MSCI Emerging Markets (EEM) during the quarter. It also highlights a number of ETFs, including the Global X Guru ETF (GURU), the Global X Guru Activist ETF (ACTX) and the AlphaClone Alternative Alpha (ALFA), which are accessible investment vehicles through which individual investors can participate in the hedge fund trends identified in the S&P Capital IQ 2015 Q3 Hedge Fund Tracker.
“ETFs have become increasingly popular with individual and institutional investors alike, with many of the trends we’re seeing in the quarterly Hedge Fund Tracker also manifesting themselves in ETF inflows and outflows,” said Todd Rosenbluth, S&P Capital IQ Director of ETF Research. “Whether investors are looking to tap into similar themes as the large hedge funds or just monitor activity for clues into overall investor sentiment, ETFs are a vital segment to watch right now.”
Following is a summary of findings in the Q3 2015 Hedge Fund Tracker and the Trends & Ideas ETF research note:
- Hedge Funds Shed Equity Holdings: The top 10 hedge funds had aggregate equity holdings totaling $191 billion in Q3, down from approximately $200 billion in Q2, reflecting a combination of declining value of current positions and an overall decline in total equity holdings from 471 stocks in Q2 to 441 stocks in Q3.
- Amazon is Top Buy: Amazon was the most-bought single stock among top hedge funds for the first time, with a total of $2.6 billion in new hedge fund investment this quarter.
- Consumer Staples Drive Buying Activity: Hedge funds favored the non-cyclical, consumer staples sector in Q3, driving a total of $3.7 billion in aggregate buying. The consumer discretionary sector was the best-performing sector in the S&P 500 for the last 12 months though only 5th top buy for the hedge funds.
- Infotech Sell-Off: The information technology sector saw the highest amount of selling among hedge funds with a total sell-off of $1.4 billion in Q3. This was the third consecutive quarter that information technology led hedge fund selling, with eBay earning the distinction of most-sold single stock.
- Notable New Positions Taken in Teva and PayPal: Teva Pharmaceuticals and PayPal saw notable new positions taken by large funds, with four funds collectively taking a $1.9 billion stake in Teva Pharmaceuticals and one fund, Icahn Capital, taking a new $1.6 billion position in PayPal. Significant exits were made in Priceline Group, Microsoft and MasterCard.
S&P Capital IQ 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 Capital IQ 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 Capital IQ 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.
About S&P Capital IQ + SNL Financial
S&P Capital IQ and SNL Financial, a business unit of McGraw Hill Financial (NYSE:MHFI), is a leading provider of multi-asset class and real time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, governments, corporations and universities around the world. The newly combined firm, previously S&P Capital IQ and SNL Financial, integrates breaking news, comprehensive data and analysis into a variety of tools to help track performance, generate alpha, identify new trading and investment ideas, and perform investment risk analysis. The firm offers the S&P Capital IQ, SNL, Global Credit Portal and Market Scope Advisor desktops as well as enterprise solutions, such as S&P Capital IQ Valuations; and research offerings from Leveraged Commentary & Data, Global Markets Intelligence, SNL Kagan, SNL Energy, SNL Real Estate and SNL Metals & Mining. Together, S&P Capital IQ and SNL sharpen financial intelligence into the wisdom today’s investors need. For more information, visit www.spcapitaliq.com or www.snl.com.
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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.
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