The top hedge funds managed approximately USD159 billion in equity holdings in the first quarter of 2017, an increase from the USD153 billion under management in Q4 2016, according to S&P Global Market Intelligence’s latest Hedge Fund Tracker analysis.
The total number of equity positions held also increased from 424 in Q4 to 427 in Q1, as hedge funds made a significant move into the consumer staples sector.
The quarterly S&P Global Market Intelligence Hedge Fund Tracker, which reviews 13F filings by pure play hedge funds, provides an aggregate analysis of hedge fund equity ownership that highlights hedge fund investments in specific stocks and sectors.
"The volume of hedge fund buying in the consumer staples sector this past quarter was the highest level of buying activity we've seen in that sector since we began tracking this data," says Pavle Sabic (pictured), head of market development, S&P Global Market Intelligence. "This momentum is clearly a signal that hedge funds, as a group, are seeing upside potential in consumer staples; it will be telling to see how those moves evolve over the remainder of the year."
According to the analysis, the consumer staples sector was the biggest net buy for the top pure play hedge funds, with USD3.4 billion in new purchases made during the quarter. Currently, 15 per cent of top fund equity holdings are concentrated in the sector, up from around 6 per cent in 2013.
Hedge funds bought 30.3 million shares of Procter & Gamble stock in Q1, for a total investment of USD2.7 billion. Other stocks receiving attention from hedge fund buyers were Praxair (USD1.4 billion), Marriott (USD1.4 billion), Constellation Brands (USD859 million), and Formula One Group (USD765.3 million).
The information technology and financial sectors saw the largest volume of hedge fund selling in Q1, with Microsoft (USD1.6 billion), Amazon (USD1.6 billion), and Autodesk (USD912 million). Other significant sell-offs were noted in Safran (USD898 million) and Charter Communications (USD732 million).
Total equity AUM for hedge funds in the analysis increased to USD159 billion in the quarter, USD6 billion higher than the USD153 billion reported in Q4 2016. The total number of equity positions held increased from 424 in Q4 2016 to 427. Soroban Capital Partners was the most active hedge fund in the equity markets.
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