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Q1 50 Top Hedge Funds Holdings

Courtesy of FactSet, here are the findings of the quarterly ownership highlights of the Top 50 Edge Funds:

Q1 2016: Quarterly Highlights

  • Equity Exposure Declines 6.9% in Q1: The top 50 hedge funds decreased their equity exposure by 6.9% in Q1.
  • All Ten Sectors Hit with Aggregate Sales: All ten GICS sectors experienced aggregate sales, with the Information Technology, Energy, and Consumer Discretionary groups leading the selloff
  • Top PurchaseFacebook;
  • Top Sale- Apple:
  • Facebook was the largest purchase by the top 50 hedge funds in Q1, while Apple was the largest sale.
  • Funds Unload U.S. and Chinese Equities: Hedge funds dumped $55 billion worth of U.S. equities and $2.8 billion worth of Chinese equities during the quarter.
  • Hedge Fund Holdings Underperforming Year-to-Date: The aggregate hedge fund portfolio of the top 50 holdings has underperformed the S&P 500 Total Return Index in Q1 and on a year-to-date basis.

Top 50 Hedge Funds Sell Information Technology:

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 ten 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.

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.
  • Broadcom Limited experienced a similar pattern to Apple.

Facebook is Largest Purchase by Hedge Funds in Q1

Despite the mass selling within the Information Technology sector, the top 50 hedge funds managed to make some purchases 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 in Q1.

EMC Corporation was another company in the Information Technology sector that hedge funds seemed to favor.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 ten purchase during Q4

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.

Funds Remove $10 Billion from Energy and Consumer Discretionary

In addition to the aggregate sales in the Information Technology sector, the top 50 hedge funds also significantly decreased their positions in the Energy and Consumer Discretionary groups.

  • Hedge funds removed $10 billion from the Energy sector, with $950 million in outflows coming from Schlumberger NV, and over $1 billion leaving Halliburton and Pioneer Natural Resources.
  • Another $10 billion came out of the Consumer Discretionary sector. Time Warner Cable and Amazon, which represented the two largest holdings in the sector, each experienced a large selloff during the quarter.
  • Hedge funds removed $1 billion worth of stock in Time Warner Cable and $691 million worth of stock in Amazon.
  • Additionally, McDonald’s suffered an even larger blow with $1.4 billion in shares leaving the fast food chain.
  • The big hit within the sector came from the Media GICS industry group. The top 50 hedge funds sold off $4.3 billion worth of stock in the Media group, making it the fifth largest aggregate sale of a GICS industry group in Q1. This is not a new occurrence for media companies. Back in Q4, the Media group saw hedge fund outflows of nearly $3 billion.

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.

  • Consumer Discretionary Becomes Largest Sector Weight in Aggregate
  • Hedge Fund Portfolio With the amount of selling that hedge funds did in the Information Technology sector during Q1, the group now makes up only 17.8% of the aggregate hedge fund portfolio, compared to 19.5% in Q4
  • Hedge Funds Unload $55 Billion Worth of U.S. Equities The top 50 hedge funds sold off U.S equities for the second consecutive quarter.
  • Funds unloaded nearly $55 billion worth of shares in U.S. equities during the first quarter, which was more than triple the value removed in Q4
  • Exposure to Chinese Equities Falls to 0.5% The top 50 hedge funds were net sellers of Chinese equities as well.
  • Funds disposed of $2.8 billion worth of shares in Chinese stocks during the quarter, largely led by Chinese technology companies, NetEase, Baidu, Sohu.com, and Alibaba. Online retailer, Vipshop Holdings, saw over $500 million in aggregate hedge fund sales.
  • Activist Investors Buy Baxalta and Alphabet;
  • Icahn Exits Hologic; ValueAct Sells Halliburton

In the end,the bottom line:Hedge Fund Holdings Underperforming in 2016

here are the top holdings, top buys and top sales of the 50 biggest holdings in Q1.

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