After breaking down the major investment moves of ten of the world’s most prominent hedge funds, we saw some clear trends. By analyzing the David Teppers, Berkshires and Bridgewaters of the world, we found no one was very fond of energy stocks, financials weren’t noticeable in most anyone’s core positions (Warren Buffett was the exception) and tech was the one sector most agreed on, though there wasn’t much consensus on specific companies.
We wanted to see how this assessment measured up against all 13F-filing hedge funds (assets under management of over $100 million), in addition to institutions to see if those same themes held. We used Q4 13F data, as aggregated by WhaleWisdom, to ascertain what stocks funds are most bullish on, and how widely held those positions are across portfolios.
Across all institutions and hedge funds, two leviathans stand out above the rest: (MSFT) - Get Report and (AAPL) - Get Report. These two trillion-dollar stalwarts are number one and two, respectively, in both total market value held by all filers ($775 billion and $738 billion, respectively) and in total number of filers reporting positions (3,201 and 3,116).
Somewhat paradoxically, both hedge funds and institutions on net decreased their overall exposure to both. Microsoft saw 314 hedge funds close or reduce their positions (1,571 institutions reducing) to 234 creating new ones or adding to it (1,536 institutions adding), for a net decrease of .09% in overall hedge fund portfolios (-1.52% for institutions). Apple had an overall 1.02% decrease for hedge funds (-.57% for institutions) with 316 funds closing or reducing (1,811 institutions reducing/closing) to 163 hedge funds creating or adding to the symbol (1,257 institutions adding/creating).
Coming in a distant third, technically, is (AMZN) - Get Report: not far behind in total filer count at 2,812, but nowhere near in total market value held ($476 billion). It did however see a material uptick in institutional ownership (7.14%) to go along with a .43% hedge fund increase. These three are the only ones that occupy the same place in both market value held and filer count. After that, you see some crossovers and a few noteworthy differences.
You'll note the true market-value third place from a company standpoint is Google. Due to its share structure, there are Class A shares ( (GOOGL) - Get Report) and Class C ( (GOOG) - Get Report), which have totals of $296.44 billion and $278.76 billion, respectively. Viewed in tandem, the two have a total of $575.21 billion in market value held across 5,131 filers, which actually makes it the No. 1 company by filer count.
The theme from our earlier fund analysis holds true: tech is the most popular sector. And for the funds that do hold tech, they appear to have a disproportionate tendency to overweight the sector. This was evidenced by tech occupying seven of the top-ten market value spots, but only five of the top-ten filer spots.
Reviewing the percentage of hedge funds who hold these tech names in their top-ten positions reinforces this observation: Microsoft again leads in this category, with 39.14% of hedge funds owning the stock, and of that a whopping 20.11% of those funds having it in their top ten. Most tech names followed this skewed concentration ratio: Apple (32.55% of hedge funds own it, 17.08% have it in their top ten), Amazon (35.71% and 16.41%), (FB) - Get Report (35.04% and 11.63%), and (GOOGL) - Get Report (32.41% and 9.68%) all have a roughly 1:2 or 1:3 ratio of top-ten holdings to overall hedge fund filings.
However all the non-tech names are less exuberantly held by funds. The most-popular non-tech names like (DIS) - Get Report (28.31% and 4.57%), (29.72% and 7.4%), (JNJ) - Get Report (28.31% and 5.18%) and JP Morgan (28.58% and 7.2%) have approximately 1:4 to 1:7 ratios. (PG) - Get Report (25.62% and 2.82%) and (XOM) - Get Report (24.88% and 1.75%) are almost begrudgingly owned by funds as diversification plays at 1:9 and 1:14 top-ten ratios.
Some interesting movements within these names: JP Morgan and P&G had notable hedge fund reductions (-1.8% and -1.71%), and Google's Class C shares had the largest reduction across both hedge funds and institutions (-2.4% and -3.07%). Johnson and Johnson had the biggest net increase for funds (2.3%) and Amazon had far and away the largest increase for institutions (7.14%).
The overall trends found in the most prominent hedge funds holds when analyzing them all in aggregate: they’re not enthusiastic about financials, energy remains a pariah and high-flying megacap tech names are the place to be.