Hedge fund managers collectively lost in the neighborhood of 4 percent to 6 percent last year, but that doesn't mean investors aren't curious about where they're putting their money.
WalletHub has published its quarterly review of companies that are at the top of hedge fund holdings lists, and many of the names in the top 10 for the fourth quarter may be familiar to investors.
The top three on the list are holdovers from the third quarter, despite a fourth quarter 2018 that was volatile and marked by periods of steep declines. Hedge funds, as a group, got through the storm with disappointing results.
"Nevertheless, it’s still a huge market," WalletHub said in its report. "Currently, there are over $3 trillion in hedge funds. To put that in perspective, only four countries, including the U.S., have a GDP higher than that."
The website noted that while the hedge fund industry is known for its billionaire managers, the median income of a hedge fund manager is $350,000.
The following, in ascending order, were the top holdings of hedge funds at the end of 2018:
10. Wells Fargo & Co.
This stock continues to be resilient despite the bank being fingered by regulators for consumer fraud multiple times over the past several years. It was the third-most valuable holding at Warren Buffett's Berkshire Hathaway at the end of the year.
9. Bank of America
The bank tripled its profits in the fourth quarter thanks to strong performance in the consumer banking business and lower corporate taxes due to Trump's tax reform. It was the second-most valuable holding at Berkshire Hathaway.
8. JPMorgan Chase & Co.
The bank failed to meet analyst expectations for the first time in 15 quarters at the end of last year, which the company blamed on the volatile market. The shares were nonetheless the biggest fourth-quarter buy of Berkshire Hathaway, which was obviously bullish on the banking industry last year.
7. Visa
The company beat forecasts thanks to consumers making greater use of credit and debit cards in a growing U.S. economy.
6. UnitedHealth Group
The health insurance company beat earnings expectations in the fourth quarter, with earnings per share up 26.6 percent from a year earlier. Its pharmaceutical unit, Optum, topped $100 billion in revenue for the first time.
5. Alphabet
The owner of Google beat analyst expectations in the fourth quarter, but the company ended the year on a down note by revealing it is dealing with declining advertising prices and tighter profit margins. It was the third-most valuable holding of Julian Robertson's Tiger Management LLC.
4. Facebook
Privacy issues did nothing to diminish the performance of this social media company, which handily beat analyst projections in its fourth-quarter earnings report with record profit. It was the second-most valuable holding of David Tepper's Appaloosa Management LP.
3. Apple
The company, battling a slump in global iPhone sales, posted $84.3 billion in revenue in the final quarter of the year, which was down 5 percent from a year earlier. It was Berkshire Hathaway's top holding at the end of the year and the biggest fourth-quarter buy of Jim Simons' Renaissance hedge fund.
2. Amazon
The online retail giant beat analyst forecasts in the fourth quarter, but still saw its share price drop after warning investors of increased capital expenditures in 2019. Amazon ended the year with $232.9 billion in revenue.
1. Microsoft
The company grew revenue by 12 percent in the fourth quarter, beating analyst forecasts as it put increased focus on its cloud computing services business. It was the top holding of Tiger Management.
The full report can be viewed here.
