Where are hedge fund managers and billionaire investors putting their money?
WalletHub, an online source of financial data, decided to find the answer to that question, assuming retail investors might want to follow suit.
The top five favorite stock holdings for hedge funds as of the fourth quarter of 2017 might seem obvious: They were Microsoft, Amazon.com, Apple, Facebook and Alphabet (Google), in that order, WalletHub said.
The site analyzed reports from 400 of the largest hedge funds in the United States and ranked their holdings to come up with the funds’ top stock picks as of the fourth quarter of 2017. The analysis included only equities.
A look at the stocks that were bought and sold the most during the fourth quarter by the hedge funds results in an almost entirely different list. Apple still makes the list, this time as the stock purchased the most, followed by Fortive Corp., Aptiv PLC, Nike and Bank of America Corp.
IBM, Amazon, Facebook, Aetna and Boeing were the stocks sold the most at the end of 2017, WalletHub said.
To give an indication of the influence hedge funds can have, WalletHub noted that the 50 largest U.S.-based hedge funds have more than $6 trillion in assets under management—or more than the gross domestic product of 36 U.S. states.
“It makes sense that people pay attention to what hedge fund managers are buying, selling and holding,” the report noted.
The sectors that are most popular with hedge fund managers are technology, finances, services and health care.
WalletHub also thought it might be of interest to investors to know what large holdings some of the richest people in the world have. Warren Buffett, who manages Berkshire Hathaway, has his three largest holdings in Apple, Wells Fargo and the Kraft Heinz Company.