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Hedge Funds Shuffle IT Holdings in Q1

Earnings

By Andrew Birstingl  |  May 19, 2016

The 50 largest hedge funds decreased their equity exposure by 6.9% in Q1 2016. This marks the second consecutive quarter in which equity exposure declined. All 10 GICS sectors experienced aggregate sales, with the Information Technology, Energy, and Consumer Discretionary groups leading the selloff. The defensive sectors, such as Telecom, Utilities, Health Care, and Consumer Staples, saw the smallest amount of aggregate sales. 

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Here we'll take a look at the Information Technology sector.

Apple Goes from Top Purchase in Q4 to Top Sale in Q1

In Q4 2015, the Information Technology sector was the largest aggregate purchase by the top 50 hedge funds. Hedge funds bought $7.2 billion worth of shares in the sector, led by inflows into Apple, Broadcom, and EMC Corp. In Q1, these fund flows completely reversed. The top 50 hedge funds removed $18.7 billion from the Information Technology sector, which represented the largest selloff of any group. Apple, which was the top purchase by hedge funds last quarter, became the top sale by hedge funds in Q1. The company saw $7.1 billion of its stock removed by hedge funds. Icahn Associates holding was the main contributor to the selloff, as the activist firm exited its entire investment, valued at $4.8 billion.

Related: Apple to be Biggest Drag on S&P 500 Tech Sector

Broadcom experienced a similar pattern to Apple. The semiconductor and equipment firm was the third largest purchase in the Information Technology sector last quarter, but in Q1 Broadcom became the second largest sale overall, as hedge funds dumped $5.6 billion worth of shares in the company.  

Facebook is Largest Purchase by Hedge Funds in Q1

Despite mass selloffs in Information Technology, the top 50 hedge funds made purchases in the sector as well. One of those purchases was Facebook. Hedge funds added over $3 billion worth of Facebook stock to the aggregate portfolio, making the social networking company the top purchase of Q1. Viking Global Investors led the pack, with a new stake in Facebook worth $2.3 billion. EMC Corp. also received attention from hedge funds. The information security and data storage firm drew $1.3 billion in inflows last quarter and saw another $1.8 billion in equity additions in Q1. EMC was the third largest purchase by hedge funds in Q1 and also a top 10 purchase during Q4 2015.

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Microsoft is Most Widely Held Stock

At the end of Q1, 25 hedge funds had a position in Microsoft, making it the most widely held stock by the top 50 hedge funds. This was an increase from the 24 funds that held the stock at the end of Q4'15.  

Read more in Hedge Fund Ownership Quarterly

 

  • Sector-Level and Company-Level Weighting Relative to S&P 500
  • Top 50 Holdings: Top 50 Hedge Funds
  • Three-month Largest Holding Value Changes
  • Country Breakdown: Top 50 Hedge Funds
  • Sector Breakdown: Top 50 Hedge Funds versus S&P 500
  • Sector Movement: Top 50 Hedge Funds versus S&P 500
  • Industry Group Movement: Top 50 Hedge Funds
  • Cap Group Breakdown: Top 50 Hedge Funds

 

Andrew Birstingl

Research Analyst

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