Score a win for the boring mutual fund industry off the Facebook (FB) post-earnings stock meltdown

Mutual fund allocation to FANG stocks (Facebook FB, Amazon (AMZN) , Netflix (NFLX) , Alphabet (GOOGL) ) -- especially Facebook -- has declined during the past few years, points out Goldman Sachs. While core mutual funds have been steadily underweight (negative) FANG, growth funds only recently reduced their exposure to underweight from overweight. 

The sharp decline in growth fund allocation to FANG stocks happened in the fourth quarter of 2016, says Goldman, when both Facebook and Amazon lagged the Russell 1000 Growth Index by more than 11 percentage points.

"Most investors believe that mutual funds are overweight the popular FANG stocks, when in fact the opposite is true," reminds Goldman strategist Arjun Menon. On the other hand, hedge funds got blown up on the surprising Facebook news

"The 19% dive in Facebook's stock price hurt hedge fund returns and our VIP basket given that it appears most often as a top 10 position across our analyzed universe of U.S. hedge funds with 10 to 200 individual equity positions," says Menon.

Score one for mutual funds.
Score one for mutual funds.

What Jim Cramer's Action Alerts PLUS member club is saying after Facebook's mixed second quarter

More from Technology

Netflix's Growth Could Slow Due to Interest Rates: Analysts

Netflix's Growth Could Slow Due to Interest Rates: Analysts

Monday Madness: Is Nvidia a Hit or Miss?

Monday Madness: Is Nvidia a Hit or Miss?

Why Netflix Will Have a Good Earnings Report This Week

Why Netflix Will Have a Good Earnings Report This Week

More Tech and Finance Executives Back Away from Saudi Ties

More Tech and Finance Executives Back Away from Saudi Ties

Google in Deal to Build Telecom Cable to France

Google in Deal to Build Telecom Cable to France