While exiting economically sensitive stocks this month, hedge fund managers began investing in growth stocks again, a successful tactic that helped them beat the returns of the S & P 500.
Hedge funds actively increased their holdings in growth stocks in July, increasing their holdings by 12.8%, the highest since April 2020, according to Jefferies. Meanwhile, the Wall Street firm said the industry had reduced its risk appetite to reduce its holdings after bullish on cyclical stocks since July last year.
"hedge funds have lost interest in the financial sector in particular, while interest in healthcare, information technology and communications services has increased," Steven DeSanctis, equity strategist at Jefferies, said in a note. The performance of these stocks in July has moved in the direction of hedge fund positioning. "
Jefferies looked at the 13F report on the long-term portfolio, as well as the most popular stocks held by hedge funds for its so-called Uber Crowded portfolio. A basket of 20 stocks is up 5.2% this month, surpassing the 2.9% return of the s & p 500.
Among hedge funds and mutual funds, the top four most popular are technology blue chips-Amazon(AMZN), Facebook(FB), Alphabet (GOOG) and Microsoft(MSFT).
GoogleAlphabet, the parent company, ushered in a rising week this week, with advertising revenue surging 69 per cent in the tech giant's results. Facebook also reported better-than-expected earnings for the last quarter this week, but warned that growth would slow sharply in the future.
Investors also cheered Microsoft's massive earnings data earlier this week. The big technology company also gave an optimistic revenue forecast.
Jefferies said Nike(NKE), Activision Blizzard(ATVI) and Lam Research (LRCX) were added to the list this month, while Morgan Stanley(MS), Discovery (DFS), and LPL Financial Holdings (LPLA) are deleted. (Chinese Investment Network)