Tashi-Delek
Hedge funds have boosted their exposure to technology while cutting exposure to cyclicals, according to analysis of filings by Jefferies.
“We continue to track and write about our version of FAANG+ called the Sweet 16,” the equity team wrote in a note. “As of the end of May, Hedge Funds took up their active weight to this group by over 8% and now have their weight in-line with the S&P 500 (SP500) (NYSEARCA:SPY) (IVV) (VOO), however, the weight to individual names differs greatly.”
“Hedge funds are now marginally market weight whereas one month ago the underweight versus the S&P 500 stood at 5.1%,” Jefferies said. “The portfolio weight sits at 31.6%.”
Among the group, hedge Funds are most notably overweight Meta (META), Nvidia (NVDA) and Netflix (NFLX), while very underweight Apple (AAPL), Tesla (TSLA) and Alphabet (GOOGL). They were short Adobe (ADBE), Fiserv (FI), Apple, Broadcom (AVGO), Tesla and Texas Instruments (TXN).
The Sweet 16
- Alphabet (GOOGL), HF weight 1.6, S&P 500 weight 3.9, difference -2.3
- Meta (META), 7.2, 1.7, 5.5
- Amazon (AMZN), 6.1, 3, 1, 3
- Microsoft (MSFT), 8.8, 7, 1.8
- PayPal (PYPL), 0.6, 0.2, 0.4
- Netflix (NFLX), 3.2, 0.5, 2.7
- Adobe (ADBE), -0.1, 0.5, -0.6
- Qualcomm (QCOM), 0.2, 0.4, -0.2
- Fiserv (FI), -0.2, 0.2, -0.4
- Nvidia (NVDA), 6.2, 2.7, 3.5
- Apple (AAPL), -1.9, 7.5, -9.4
- Broadcom (AVGO), -0.6, 1, -1.5
- Tesla (TSLA), -3, 1.6, -4.5
- Texas Instruments (TXN), -0.8, 0.5, -1.3
- AMD (AMD), 2.3, 0.6, 1.8
- Intel (INTC), 0.5. 0.4, 0.1
“Our ‘Uber Crowded’ portfolio looks across 13F filings to find names that are popular among both Long Only & Hedge Fund investors,” Jefferies said. “We refreshed the portfolio and only saw 4 adds/deletes in May. The adds were Coca-Cola (KO), Intuit (INTU), Eli Lilly (LLY) and J&J (JNJ); whereas the deletes were Lululemon (LULU), Booking Holdings (BKNG), PayPal (PYPL) and UnitedHealth (UNH).”
“As for the sectors, we see seven groups represented with six names coming from Tech (XLK) and four from Health Care (XLV).”
The Uber Crowded portfolio:
- Microsoft (MSFT), net long weight 8.8, % of all mutual funds 30.4%
- Meta (META), 7.2, 19.3%
- Nvidia (NVDA), 6.2, 21.8%
- Amazon (AMZN), 6.1, 24.8%
- Netflix (NFLX), 3.2, 12.1%
- Adobe (ADBE), 2.4, 17.8%
- Visa (V), 2.3, 24%
- AMD (AMD), 2.3, 15.3%
- Elevance (ELV), 1.7, 10.2%
- McDonald’s (MCD), 1.6, 10.9%
- Salesforce (CRM), 1.5, 15.8%
- Linde (LIN), 1.3, 12.1%
- Intuitive Surgical (ISRG), 1.1, 13%
- P&G (PG), 1.1, 13.6%
- Coca-Cola (KO), 1.1, 10.1%
- PepsiCo (PEP), 1, 11.9%
- Intuit (INTU), 0.9, 14.5%
- Eli Lilly (LLY), 0.9, 18.6%
- J&J (JNJ), 0.8, 10.9%
“The other portfolio that looks at Long-Only holdings is our Battleground,” Jefferies said. “These are stocks that Hedge Funds are short, while many of Long Only own.”
“We saw low turnover in May with only five adds/deletes. The adds were NXP Semi (NXPI), Costco (COST), Microchip Technology (MCHP), Wells Fargo (WFC) and PODD, while the deletes were Amgen (AMGN), Stryker (SYK), EOG Resources (EOG), PG&E (PCG), and The Trade Desk (TTD).
This portfolio has eight sectors represented with Tech (XLK) and Discretionary (XLY) the favorites once again with eight and four names, respectively.
The Battleground portfolio:
- Tesla (TSLA), net weight -3, % of all mutual funds 14.3%
- Apple (AAPL), -1.9, 24.9%
- ON Semi (ON), -1.8, 11%
- Exxon Mobil (XOM), -1.2, 11.1%
- UPS (UPS), -1.1, 11.9%
- Charter Communications (CHTR), -1, 7.3%
- Palo Alto Networks (PANW), -0.9, 10.7%
- Home Depot (HD), -0.9, 15.5%
- NXP Semi (NXPI), -0.9, 7.4%
- Costco (COST), -0.9, 13.2%
- Old Dominion Freight (ODFL), -0.9, 9.2%
- Blackstone (BX), -0.8, 6.3%
- Microchip Technology (MCHP), -0.8, 9.7%
- Texas Instruments (TXN), -0.8, 13.6%
- Lowe’s (LOW), -0.8, 10.3%
- Insight Enterprises (NSIT), -0.7, 5.6%
- Monolithic Power Systems (MPWR), -0.7, 1.1%
- Wells Fargo (WFC), -0.7, 9.9%
- CarMax (KMX), -0.7, 6.4%
- Insulet (PODD), -0.6, 10.9%
