The health care sector has driven the lion's share of buying among the largest pure play hedge fund managers in Q1 2015, with net buys of USD4.8 billion in the quarter, according to the latest S&P Capital IQ Hedge Fund Tracker, a review of 13F fillings by hedge funds.
The largest single stock purchase and the largest sell was Valeant, with USD3.7 billion in overall buys and USD1.4 billion in sells in the first quarter. This was the first time in eight quarters of running the research that a single company was simultaneously the top buy and top sell among hedge funds.
"The Q1 Hedge Fund Tracker results provide some fascinating insight into the trends hedge fund managers are watching most closely, particularly in the health care sector," says Pavle Sabic, Financial Risk Manager, S&P Capital IQ. "By analysing SEC filings in this manner, we are giving the marketplace a timely reading on investor sentiment among some of the largest investors in the world."
Based on these trends among hedge fund managers, S&P Capital IQ also produced a Trends & Ideas research note that names specific ETFs that are weighted toward the stocks named in the 2015 Q1 Hedge Fund Tracker. The research points out that a number of ETFs, including the Global X Guru ETF (GURU 27 Marketweight), the Global X Guru Activist ETF (ACTX15 NR) and the AlphaClone Alternative Alpha (ALFA 46 NR), are accessible investment vehicles through which individual investors can participate in hedge fund trends.
"While it would not be realistic to try to mimic hedge fund strategies, it is possible for individual investors to access the same trends these hedge fund managers are watching through ETFs," says Todd Rosenbluth, S&P Capital IQ Director of ETF Research. "The allure of following a 'smart money' strategy is not lost on ETF managers who have created many options for tracking hedge fund-like strategies."