Broadly, hedge funds have mostly trailed their market benchmarks; however, investors may find interest in tracking changes in positions and sectors for the hedge fund group. Investors should keep in mind that hedge fund positions are reported once a quarter and the report can be as late as 45 days following a quarter. Consequently, a fund's report may not be reflective of the fund's current allocations.
A recent Factset report notes changes in hedge fund positions and sector allocations in the second quarter. Highlights from the report:
- The fifty largest hedge funds increased their equity exposure by 3% and forty-five of the fifty managers showed an increase in equity assets in Q2 2012.
- Apple (AAPL) was present in the majority of fund portfolios and was the top holding of 24% of the 50 hedge fund companies.
- Hedge fund companies were most active in increasing their allocations to Procter & Gamble (PG) and BP PLC (BP) in Q2 2012.
- Citigroup (C) experienced the largest equity outflows, but, relative to starting portfolio values, Cisco (CSCO) and Crown Castle International (CCI) experienced larger declines (-29.5% and -24.3%, respectively).
- Facebook (FB) marked the largest new position over the quarter, but its ending weight in the aggregate portfolio amounted to less than 0.1%.
From a country and sector perspective, the U.S. market attracted the most interest. Energy, technology and staples were the favored sectors.
Disclosure: Our firm is long PG