Microsoft overtakes Amazon as the most popular hedge fund bet: Goldman Sachs


Wall Street’s fast money has a new favorite bet.

Microsoft (MSFT) has replaced Amazon (AMZN) as the top 10 most popular holding company among hedge funds, strategists at Goldman Sachs led by Ben Snyder said in a recent note.

The investment bank’s Hedge Fund Trend Monitor, which analyzes holdings in 786 companies in the industry, found that 82 have Microsoft in their top 10 long positions; Amazon appeared in the leading group of choices 79 times.

Other names frequently appearing in the top 10 hedge fund rankings included Alphabet (GOOGL), Uber (UBER), and Netflix (NFLX). Uber and Netflix are in the top 5 most popular hedge funds for the first time.

Microsoft CEO Satya Nadella addresses a press conference on February 27, 2019 in Berlin, Germany. Reuters/Fabrizio Bensch

Mega-cap tech giants continue to dominate the list of the most popular top hedge fund holdings, while Big Tech has taken a serious plunge this year amid rising interest rates.

Federal Reserve officials have been working to curb inflation by aggressively raising interest rates in 2022, with the central bank announcing a cumulative 3.75% increase in its benchmark interest rate range so far this year. High rates have reduced growth prospects and assessment of challenge in the technology sector.

Meta Platforms (META), down 66% this year and one of the worst performing companies in the S&P 500, dropped out of the top five hedge fund holdings for the first time since 2014.

Goldman’s hedge fund ‘VIP’ basket consists of the 50 stocks that appear most frequently in the top 10 fundamental hedge funds, with long positions in stocks worth approximately $1.5 trillion. Goldman Sachs compiled its latest report from 13F filings on Nov. 13.

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The basket has outperformed the S&P 500 in 58% of quarters since 2001, averaging 34 basis points outperformance in winning quarters, according to Goldman data.

This year, however, the “VIP” list is down nearly 30% since the start of the year, compared to a 16% drop in the S&P 500. The underperformance has put Goldman’s basket on track for its second-worst year in two decades. Monitor the performance of this group.

Goldman noted that hedge funds have generally performed well in recent months, despite the poor performance of the most popular long positions.

The bank’s VIP has lagged since early 2021, but has outperformed the market in Q3 2022 amid a broad recovery in equity markets; In recent weeks, however, analysts at Goldman say the basket’s underperformance is back.


Alexandra Semenova is a reporter for Yahoo Finance. follow him on twitter @alexandraandnyc

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