$5 trillion fund favorites: 12 stocks loved by mutual funds and hedge funds

Currency trader on video call from his home office

Alistair Berg

According to Goldman Sachs’ equity group, hedge funds and mutual funds will have exposure to stocks that will outperform if U.S. inflation and interest rates fall next year.

Goldman analyzed 786 hedge funds with $2.3 trillion in total equity positions and 548 mutual funds with $2.5 trillion AUM at the beginning of Q4 2022.

“Hedge funds and mutual funds are cyclically overloaded sectors like Industry (XLI), Material (XLB) and energy (XLE), “strategist David Kostin wrote in a note.” Both Hedge Funds and Mutual Funds Are Underestimating Defensive Gadgets (XLU) and Consumer Staples (XLP) industry. However, both of these funds are overweight Healthcare (XLV), which we also recommend as an overweight position.”

“Information technology (XLK) was the largest disproportionate investment for both types of investors, although both increased their investment in the sector in the third quarter,” Kostin said.XLF) represents an area where hedge funds and mutual funds hold different risks: Mutual funds are overweight while hedge funds are underweight.”

He added: “Another area where hedge funds and mutual funds disagree is Big Tech.

Microsoft (MSFT), at number 1, Amazon (AMZN), Number 2, Alphabet (GOOG) (GOOGLE) in third place and Apple (AAPL), 7th place, among the 10 most important positions among hedge funds, Kostin said. But the mutual funds were almost 5 percentage points behind the group.

According to Goldman’s review, there are 12 favorites between hedge funds and mutual funds.

“We define shared favorites as stocks screened into both the VIP basket of our VIP Hedge Fund and Mutual Fund,” said Kostin.

“Favorite deals are shared on average with a P/E NTM spread of 34% compared to the average S&P 500 (SP500) (spy) stocks (23x vs 17x), above the long-term average of 18%. Consensus expects 15% earnings growth for the average shared favorite by 2023, compared with 7% for the average S&P 500 stock.”

Dozens of wishes:

  1. Constellation energy (NASDAQ:CEG)
  2. Danaher (NYSE:DHR)
  3. Fiserv (FISV)
  4. People (HUM)
  5. Mastercard (NYSE:GHOST)
  6. Service Now (NOW)
  7. Schwab (SCHW)
  8. Uber (UBER)
  9. UnitedHealth (UNH)
  10. Passport (DRAW)
  11. working day (DAY)
  12. Wells Fargo (WFC)

On the other hand, there are 23 stocks – mostly big names – that hedge funds are shorting and mutual funds are underweight, according to a Goldman analysis.

The Unloved:

  1. AbbVie (ABBV)
  2. Chevron (CVX)
  3. IBM (IBM)
  4. Coca-Cola (KO)
  5. Income from real estate (Umbrella)
  6. AT&T (t)
  7. AMD (AMD)
  8. Disney (dis)
  9. smart (INTC)
  10. McDonald’s (MCD)
  11. PepsiCo (PEP)
  12. Walmart (WMT)
  13. Broadcom (AVGO)
  14. Ford (F)
  15. JJ (JNJ)
  16. 3M (MMM)
  17. Pfizer (PFE)
  18. Exxon Mobil (XOM)
  19. cost (PRICE)
  20. Warehouse at home (HD)
  21. JPMorgan Chase (JPM)
  22. modern (mRNA)
  23. Procter & Gamble (PG)

View the largest stock market catalyst for next week.


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