Analysts at Goldman Sachs have published their latest hedge fund trend monitor, which includes a ranking of the VIP – very important positions – stocks that most frequently appear among firms’ 10 largest holdings.
Tech companies dominate the rankings with Amazon in the number one spot and the likes of Facebook (3), Alphabet (5) – the parent of Google – Microsoft (7), Yahoo (8) and Apple (9) all featuring in the top 10.
Other favourites are the Cable and satellite company Charter Communications (2), pharmaceuticals giant Allergan (4), technology hardware group EMC Corp (6) and semiconductor company Broadcom (10).
The Goldman Sachs ranking, dated August 18, comes after a separate report from S&P Global Market Intelligence showed that 10 of the biggest stock picking hedge funds in the US, managing $ 150 billion between them, dumped billions in Apple stock during the second quarter. In all, these hedge funds sold a net $ 6.3 billion worth of information technology stocks during the period. A total of $ 5.3 billion of Apple stock was sold.
The Goldman Sachs research took in a much broader data set. The bank analysed 826 hedge funds with $ 1.1 trillion worth of long positions and $ 652 billion in short bets at the start of the second quarter.
Earlier research by Goldman Sachs into these VIP stocks had raised concerns that hedge funds were crowding into the same companies, with this concentration reaching a record in the first quarter of 2016.
The issue was raised again in the latest report, although the bank’s analysts noted that funds had started to shift assets away from the most crowded positions.
Still, a Goldman Sachs basket of the 20 most concentrated holdings has returned 20% over the year to August 15, easily outperforming the S&P 500’s return of 9% over the same period.