Hedge funds shifted from market-leading technology and health-care investments in the second quarter, adding to bets on a cyclical recovery with larger positions in industrial and financial shares—and cheaper relative valuations in the market.
Goldman Sachs analysts recently compiled holdings of 815 hedge funds that managed about $2 trillion as the third quarter began. From the start of the year until Aug. 19, the
index rose 6% while the Nasdaq 100 added 30%. That’s much better than the average equity hedge fund in Goldman’s analysis, which returned 2% over the same period. But hedge funds’ best ideas did beat the S&P, with a basket of top-50 holdings returning 18%.
Health-care stocks remain the most concentrated hedge fund holdings, at about 21%, well above their 14% in the Russell 3000 index. But hedge funds cut their health-care position by three percentage points in