Top Funds' Activity in Q4 2021
There's no denying that the market has been particularly turbulent in recent months as inflation soars. Market watchers are debating whether inflation has peaked, which will impact which stocks ride the wave and which sink.
The 13F filings from Q4 are in
As a result, individual investors may be watching the smart money even more closely as they try to choose stocks wisely despite the extreme volatility. Hedge funds and other institutional investors have filed their quarterly 13Fs with the Securities and Exchange Commission, providing a trail of breadcrumbs for individual investors to follow.
An overhead analysis of hedge fund trades during the fourth quarter shows that tech stocks received a boost from the smart money, as institutional investors boosted their tech holdings by about 1% in aggregate. However, things have changed so rapidly that it may no longer be wise to stock up on tech.
Among the biggest gainers in tech during the fourth quarter were Nokia, VMware and Clarivate. Meanwhile, hedge funds slashed their communications holdings by about 1%, with Meta Platforms, Charter Communications and Comcast leading the decline.
Despite the broad-based selloff that has swept through tech temporarily at different times over the last several months, hedge funds widely rotated into tech during the fourth quarter, shunning communications in the process. However, rising interest rates threaten both tech and communications this year.
A review of the fourth-quarter 13F filings also reveals one standout stock. During the fourth quarter, there was quite a bit of activity in electric vehicle manufacturer Rivian Automotive. Rivian has trended steadily lower since its peak in mid-November and is down more than 34% over the last six months. Year to date, the automaker's stock is down more than 35%.
The latest 13F filings suggest that several major institutional investors decided to buy the dip in Rivian stock. Among the well-known investors who established positions in Rivian during the fourth quarter was George Soros, who disclosed a position of almost 20 million shares in the electric pickup maker.
Phillipe Laffont's Coatue Management established a new position in Rivian, along with Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Andreas Halvorsen's Viking Global, and Chase Coleman's Tiger Global.
Movements in tech in Q4
Soros also established a position in Peloton Interactive, while Tiger Global added to its stake. On the other hand, Coatue and Viking Global cut back on the exercise tech company. Baupost Group bought Fiserv, Grab Holdings, and NortonLifeLock and added to Qorvo but exited eBay and cut its stake in Facebook parent Meta Platforms, Alphabet, and Intel.
Coatue exited 3D Systems, Robinhood Markets and Nuance Communications. It boosted its stakes in Tesla, Microsoft, NVIDIA, and Amazon but cut back on Door Dash, Twilio, and Snowflake. Maverick Capital added to its positions in Amazon, Activision Blizzard, and NVIDIA but cut its stakes in Coupang and Adobe Systems. Leon Cooperman's Omega Advisors exited Alibaba and Meta Platforms, while Soros Fund Management added to its stake in Uber but cut back on Amazon and Alphabet.
Tiger Global added to its stakes in Snowflake but went against the push toward tech by slashing its positions in Microsoft, Roblox and Amazon. David Einhorn's Greenlight Capital established a new position in Intel but slashed its stakes in GoPro and Twitter, while Glenview Capital established new positions in Activision Blizzard, Alibaba and Amazon and added to its Uber stake. It exited Meta Platforms and slashed its stake in Fiserv.
Third Point established a new position in Grab Holdings and boosted its stake in Dell while maintaining its positions in Microsoft and Alphabet. The fund exited DiDi Global, Intel, Meta Platforms, and Activision Blizzard. Paul Singer's Elliott Management maintained its position in Twitter. ValueAct boosted its stake in Fiserv, while Jeffrey Smith's Starboard Value established a new position in GoDaddy and exited Box Inc.
Viking Global established new positions in Twilio and Take-Two Interactive and added to its stakes in Uber and Meta Platforms. It also bucked the tech uptrend by exiting Snowflake. Warren Buffett's Berkshire Hathaway, which has long avoided tech under his leadership, established a new position in Activision Blizzard and maintained its positions in Apple, Microsoft and Amazon. The firm exited Sirius XM Holdings.
David Tepper's Appaloosa exited Twitter, Alibaba, and Qualcomm and cut back on Uber. Corvex Management maintained its positions in Microsoft and Alphabet but exited Activision Blizzard. Stanley Druckenmiller's Duquesne established a new position in Snap Inc and increased its stakes in Coupang, Carvana, and Microsoft while exiting Meta Platforms and cutting back on Amazon and Alphabet.
Tiger Global established a new position in Grab Holdings and boosted its stakes in JD.com, Carvana, Snowflake, and Door Dash while maintaining its positions in Meta Platforms, Alibaba, and Netflix. The fund cut back on Roblox, Microsoft, and Uber. Baupost Group established new positions in Grab Holdings and Fiserv, boosted its stake in Qorvo, and exited eBay. It also cut back on Intel and Meta Platforms.
Soros cut back on Activision Blizzard, exited Coupang, and boosted its stake in Uber.
Coatue bucked the trend against communications by establishing a new position in Discovery Communications. Greenlight Capital also established a new position in Discovery Communications. Third Point also went against the trend in communications by establishing a new position in Comcast, while Viking Global boosted its Comcast and T-Mobile stakes.
Nelson Peltz's Trian Fund maintained its position in Comcast.
Berkshire Hathaway cut back on Charter Communications, while Appaloosa, Duquesne, and Corvex cut back on T-Mobile. Elliott Management maintained its position in AT&T.
Payments and financials
Coatue and Corvex established new positions in Visa and Mastercard, while Maverick Capital boosted its stakes in both credit card companies but exited Blackstone. Appaloosa exited Visa, while Corvex Management established new positions in Visa and Mastercard. Berkshire Hathaway cut back on Visa and Mastercard and maintained its positions in Bank of America, Bank of New York Mellon, and US Bancorp.
Greenlight established a new position in Global Payments as Glenview Capital added to its stake in the company. Glenview also exited Visa, while Corvex maintained its position in JPMorgan. ValueAct maintained its position in Citigroup, and Viking Global established a new position in American International Group. Soros cut back on JPMorgan. Tiger Global boosted its Square stake.
Other notable activity
Other key exits include PG&E by Baupost. Appaloosa also slashed its stake in PG&E alongside Third Point, which also cut back on Walt Disney alongside Corvex. Coatue established a new position in Pfizer, while Omega boosted its stake in General Motors alongside Soros.
Appaloosa established a new position in GM. Third Point established new positions in Hertz and Expedia while Duquesne maintained its positions in Airbnb and Booking Holdings and exited Penn National Gaming. Duquesne also cut back on Expedia. Viking Global established a new position in Zillow and boosted its General Electric stake. Soros added to its stake in Caesars Entertainment.
What about the current quarter?
While many individual investors are making their decisions based on this week's 13F filings, which show stock movements during the fourth quarter, it's important to look forward rather than backward. It's no secret that interest rates are moving higher in 2022, but the question is how quickly the Fed will raise them. However, when rates do rise, they will be damaging to tech companies that carry heavy loads of debt.
The tech-heavy Nasdaq Composite entered correction territory in January and has continued to struggle. Unprofitable tech names that became the poster children of the pandemic bull market will face serious issues when debt is no longer cheap. And as inflation rages, investors will naturally seek out companies with strong brands and the pricing power to pass their higher costs along to customers.
This week, we learned about what the world's top money managers bought and sold last quarter.
The problem? Apart from the lag in reporting (45-day lag), it's been a bloodbath in the stock market except for energy stocks which are once again leading every other sector by a considerable margin:
Yes, tensions between Russia, Ukraine and the US have boosted oil prices and added fuel to the inflation fire, but the point is it's been a terrible start to the year and communication services (XLC), real estate (XLRE) and technology stocks (QQQ) have beared the brunt of the selloff thus far.
And when you really drill down, it's far, far worse.
Hyper growth darlings and other popular stocks from just a year ago are being decimated.
We know what happened to Meta Platforms' (Facebook) stock two weeks ago, but consider these stocks which got clobbered this week:
And this is just a small sample of the carnage this week.
Below, you see which large cap stocks got dinged this week (full list available here):
And here are the large cap stocks that have gotten dinged so far this year (full list here):
Geez! I look at these stocks and remember when they were flying high last year and everyone on CNBC was touting them stating they will go higher.
BOOM! The liquidity orgy is over and it's painful, especially for hyper-growth Ark Innovation stocks, they have been decimated with the exception of everyone's favorite ESG poster boy:
Will Tesla succumb to the same carnage that has hit other Ark Innovation stocks?
I think it's only a matter of time but shorting this stock is just as dangerous as going long here. Still, mark my words, when this stock craters, it will be a seismic bloodbath.
Anyway, I used to invest in top hedge funds and grill their managers hard on their positions, macro views and risk management (most are terrible at managing downside risks).
I can sit down with all these "gurus" and drill down into their portfolios and point out the dogs and what's worth holding on to.
Right now is a dangerous time to be invested in stocks and bonds.
Everyone is wondering if the Nasdaq will retest its January low and hold or keep sinking lower:
I have no clue, the only thing I know is investors need to manage their risk carefully here because the monetary coronavirus that afflicted bears two years ago is gone.
One question I always get, especially from young traders, is can stocks go a lot lower?
My answer is unequivocal: "You bet your ass they can go a lot lower".
Unless you've lived through the tech meltdown of 2001 and the great financial crisis meltdown, you have no clue about how it feels being in a nasty bear market.
Who knows? Maybe not but always, always be prepared for anything and manage your downside risk very carefully.
Never mind chasing Chase Coleman and other gurus, that’s a sure road to ruin!
On that cheery note, have fun looking into the portfolios of the world's most famous money managers.
The links below take you straight to their top holdings and then click to see where they increased and decreased their holdings (see column headings).
Top multi-strategy and event driven hedge funds
As the name implies, these hedge funds invest across a wide variety of hedge fund strategies like L/S Equity, L/S credit, global macro, convertible arbitrage, risk arbitrage, volatility arbitrage, merger arbitrage, distressed debt and statistical pair trading. Below are links to the holdings of some top multi-strategy hedge funds I track closely:
1) Appaloosa LP
2) Citadel Advisors
3) Balyasny Asset Management
4) Point72 Asset Management (Steve Cohen)
5) Peak6 Investments
6) Kingdon Capital Management
7) Millennium Management
8) Farallon Capital Management
9) HBK Investments
10) Highbridge Capital Management
11) Highland Capital Management
12) Hudson Bay Capital Management
13) Pentwater Capital Management
14) Sculptor Capital Management (formerly known as Och-Ziff Capital Management)
15) ExodusPoint Capital Management
16) Carlson Capital Management
17) Magnetar Capital
18) Whitebox Advisors
19) QVT Financial
20) Paloma Partners
21) Weiss Multi-Strategy Advisors
22) York Capital Management
Top Global Macro Hedge Funds and Family Offices
These hedge funds gained notoriety because of George Soros, arguably the best and most famous hedge fund manager. Global macros typically invest across fixed income, currency, commodity and equity markets.
George Soros, Carl Icahn, Stanley Druckenmiller, Julian Robertson have converted their hedge funds into family offices to manage their own money.
1) Soros Fund Management
2) Icahn Associates
3) Duquesne Family Office (Stanley Druckenmiller)
4) Bridgewater Associates
5) Pointstate Capital Partners
6) Caxton Associates (Bruce Kovner)
7) Tudor Investment Corporation (Paul Tudor Jones)
8) Tiger Management (Julian Robertson)
9) Discovery Capital Management (Rob Citrone)
10 Moore Capital Management
11) Element Capital
12) Bill and Melinda Gates Foundation Trust (Michael Larson, the man behind Gates)
Top Quant and Market Neutral Hedge Funds
These funds use sophisticated mathematical algorithms to make their returns, typically using high-frequency models so they churn their portfolios often. A few of them have outstanding long-term track records and many believe quants are taking over the world. They typically only hire PhDs in mathematics, physics and computer science to develop their algorithms. Market neutral funds will engage in pair trading to remove market beta. Some are large asset managers that specialize in factor investing.
1) Alyeska Investment Group
2) Renaissance Technologies
3) DE Shaw & Co.
4) Two Sigma Investments
5) Cubist Systematic Strategies (a quant division of Point72)
6) Numeric Investors now part of Man Group
7) Analytic Investors
8) AQR Capital Management
9) Dimensional Fund Advisors
10) Quantitative Investment Management
11) Oxford Asset Management
12) PDT Partners
13) Angelo Gordon
14) Quantitative Systematic Strategies
15) Quantitative Investment Management
16) Bayesian Capital Management
17) SABA Capital Management
18) Quadrature Capital
19) Simplex Trading
Top Deep Value, Activist, Growth at a Reasonable Price, Event Driven and Distressed Debt Funds
These are among the top long-only funds that everyone tracks. They include funds run by legendary investors like Warren Buffet, Seth Klarman, Ron Baron and Ken Fisher. Activist investors like to make investments in companies where management lacks the proper incentives to maximize shareholder value. They differ from traditional L/S hedge funds by having a more concentrated portfolio. Distressed debt funds typically invest in debt of a company but sometimes take equity positions.
1) Abrams Capital Management (the one-man wealth machine)
2) Berkshire Hathaway
3) TCI Fund Management
4) Baron Partners Fund (click here to view other Baron funds)
5) BHR Capital
6) Fisher Asset Management
7) Baupost Group
8) Fairfax Financial Holdings
9) Fairholme Capital
10) Gotham Asset Management
11) Fir Tree Partners
12) Elliott Investment Management (Paul Singer)
13) Jana Partners
14) Miller Value Partners (Bill Miller)
15) Highfields Capital Management
16) Eminence Capital
17) Pershing Square Capital Management
18) New Mountain Vantage Advisers
19) Atlantic Investment Management
20) Polaris Capital Management
21) Third Point
22) Marcato Capital Management
23) Glenview Capital Management
24) Apollo Management
25) Avenue Capital
26) Armistice Capital
27) Blue Harbor Group
28) Brigade Capital Management
29) Caspian Capital
30) Kerrisdale Advisers
31) Knighthead Capital Management
32) Relational Investors
33) Roystone Capital Management
34) Scopia Capital Management
35) Schneider Capital Management
36) ValueAct Capital
37) Vulcan Value Partners
38) Okumus Fund Management
39) Eagle Capital Management
40) Sasco Capital
41) Lyrical Asset Management
42) Gabelli Funds
43) Brave Warrior Advisors
44) Matrix Asset Advisors
45) Jet Capital
46) Conatus Capital Management
47) Starboard Value
48) Pzena Investment Management
49) Trian Fund Management
51) Fayez Sarofim & Co
Top Long/Short Hedge Funds
These hedge funds go long shares they think will rise in value and short those they think will fall. Along with global macro funds, they command the bulk of hedge fund assets. There are many L/S funds but here is a small sample of some well-known funds.
1) Adage Capital Management
2) Viking Global Investors
3) Greenlight Capital
4) Maverick Capital
5) Pointstate Capital Partners
6) Marathon Asset Management
7) Tiger Global Management (Chase Coleman)
8) Coatue Management
9) D1 Capital Partners
10) Artis Capital Management
11) Fox Point Capital Management
12) Jabre Capital Partners
13) Lone Pine Capital
14) Paulson & Co.
15) Bronson Point Management
16) Hoplite Capital Management
17) LSV Asset Management
18) Hussman Strategic Advisors
19) Cantillon Capital Management
20) Brookside Capital Management
21) Blue Ridge Capital
22) Iridian Asset Management
23) Clough Capital Partners
24) GLG Partners LP
25) Cadence Capital Management
26) Honeycomb Asset Management
27) New Mountain Vantage
28) Penserra Capital Management
29) Eminence Capital
30) Steadfast Capital Management
31) Brookside Capital Management
32) PAR Capital Capital Management
33) Gilder, Gagnon, Howe & Co
34) Brahman Capital
35) Bridger Management
36) Kensico Capital Management
37) Kynikos Associates
38) Soroban Capital Partners
39) Passport Capital
40) Pennant Capital Management
41) Mason Capital Management
42) Tide Point Capital Management
43) Sirios Capital Management
44) Hayman Capital Management
45) Highside Capital Management
46) Tremblant Capital Group
47) Decade Capital Management
48) Suvretta Capital Management
49) Bloom Tree Partners
50) Cadian Capital Management
51) Matrix Capital Management
52) Senvest Partners
53) Falcon Edge Capital Management
54) Park West Asset Management
55) Melvin Capital Partners
56) Owl Creek Asset Management
57) Portolan Capital Management
58) Proxima Capital Management
59) Tourbillon Capital Partners
60) Impala Asset Management
61) Valinor Management
62) Marshall Wace
63) Light Street Capital Management
64) Rock Springs Capital Management
65) Rubric Capital Management
66) Whale Rock Capital
67) Skye Global Management
68) York Capital Management
69) Zweig-Dimenna Associates
Top Sector and Specialized Funds
I like tracking activity funds that specialize in real estate, biotech, healthcare, retail and other sectors like mid, small and micro caps. Here are some funds worth tracking closely.
1) Avoro Capital Advisors (formerly Venbio Select Advisors)
2) Baker Brothers Advisors
3) Perceptive Advisors
4) Broadfin Capital
5) Healthcor Management
6) Orbimed Advisors
7) Deerfield Management
8) BB Biotech AG
9) Birchview Capital
10) Ghost Tree Capital
11) Sectoral Asset Management
12) Oracle Investment Management
13) Palo Alto Investors
14) Consonance Capital Management
15) Camber Capital Management
16) Redmile Group
17) RTW Investments
18) Bridger Capital Management
19) Boxer Capital
20) Bridgeway Capital Management
21) Cohen & Steers
22) Cardinal Capital Management
23) Munder Capital Management
24) Diamondhill Capital Management
25) Cortina Asset Management
26) Geneva Capital Management
27) Criterion Capital Management
28) Daruma Capital Management
29) 12 West Capital Management
30) RA Capital Management
31) Sarissa Capital Management
32) Rock Springs Capital Management
33) Senzar Asset Management
34) Southeastern Asset Management
35) Sphera Funds
36) Tang Capital Management
37) Thomson Horstmann & Bryant
38) Ecor1 Capital
39) Opaleye Management
40) NEA Management Company
41) Great Point Partners
42) Tekla Capital Management
43) Van Berkom and Associates
Mutual Funds and Asset Managers
Mutual funds and large asset managers are not hedge funds but their sheer size makes them important players. Some asset managers have excellent track records. Below, are a few funds investors track closely.
2) BlackRock Inc
3) Wellington Management
4) AQR Capital Management
5) Sands Capital Management
6) Brookfield Asset Management
7) Dodge & Cox
8) Eaton Vance Management
9) Grantham, Mayo, Van Otterloo & Co.
10) Geode Capital Management
11) Goldman Sachs Group
12) JP Morgan Chase & Co.
13) Morgan Stanley
14) Manulife Asset Management
15) UBS Asset Management
16) Barclays Global Investor
17) Epoch Investment Partners
18) Thornburg Investment Management
19) Kornitzer Capital Management
20) Batterymarch Financial Management
21) Tocqueville Asset Management
22) Neuberger Berman
23) Winslow Capital Management
24) Herndon Capital Management
25) Artisan Partners
26) Great West Life Insurance Management
27) Lazard Asset Management
28) Janus Capital Management
29) Franklin Resources
30) Capital Research Global Investors
31) T. Rowe Price
32) First Eagle Investment Management
33) Frontier Capital Management
34) Akre Capital Management
35) Brandywine Global
36) Brown Capital Management
37) Victory Capital Management
39) Ariel Investments
40) ARK Investment Management
Canadian Asset Managers
Here are a few Canadian funds I track closely:
1) Addenda Capital
2) Letko, Brosseau and Associates
3) Fiera Capital Corporation
4) West Face Capital
6) 1832 Asset Management
7) Jarislowsky, Fraser
8) Connor, Clark & Lunn Investment Management
9) TD Asset Management
10) CIBC Asset Management
11) Beutel, Goodman & Co
12) Greystone Managed Investments
13) Mackenzie Financial Corporation
14) Great West Life Assurance Co
15) Guardian Capital
16) Scotia Capital
17) AGF Investments
18) Montrusco Bolton
19) CI Investments
20) Venator Capital Management
21) Van Berkom and Associates
22) Formula Growth
23) Hillsdale Investment Management
Pension Funds, Endowment Funds, Sovereign Wealth Funds and the Fed's Swiss Surrogate
Last but not least, I the track activity of some pension funds, endowment, sovereign wealth funds and the Swiss National Bank (aka the Fed's Swiss surrogate). Below, a sample of the funds I track closely:
1) Alberta Investment Management Corporation (AIMco)
2) Ontario Teachers' Pension Plan
3) Canada Pension Plan Investment Board
4) Caisse de dépôt et placement du Québec
5) OMERS Administration Corp.
6) Healthcare of Ontario Pension Plan (HOOPP)
7) British Columbia Investment Management Corporation (BCI)
8) Public Sector Pension Investment Board (PSP Investments)
9) PGGM Investments
10) APG All Pensions Group
11) California Public Employees Retirement System (CalPERS)
12) California State Teachers Retirement System (CalSTRS)
13) New York State Common Fund
14) New York State Teachers Retirement System
15) State Board of Administration of Florida Retirement System
16) State of Wisconsin Investment Board
17) State of New Jersey Common Pension Fund
18) Public Employees Retirement System of Ohio
19) STRS Ohio
20) Teacher Retirement System of Texas
21) Virginia Retirement Systems
22) TIAA CREF investment Management
23) Harvard Management Co.
24) Norges Bank
25) Nordea Investment Management
26) Korea Investment Corp.
27) Singapore Temasek Holdings
28) Yale Endowment Fund
29) Swiss National Bank (aka, the Fed's Swiss surrogate)
Below, Leslie Picker reports Berkshire's new stake in Activision Blizzard in its 13F filing.
Second, Jim Cramer, Mad Money host, joins 'Squawk Box' to discuss his first take on what to expect in the markets. He thinks it's a difficult time to buy right now.
Third, yesterday's interview with ARK's Cathie Wood and her contention that her company's portfolio is extremely undervalued. With CNBC's Scott Wapner and the 'Halftime Report' traders, Stephanie Link, Jason Snipe, Josh Brown and Shannon Saccocia.
Fourth, RiskReversal Advisors' Dan Nathan joins 'Closing Bell' to discuss the markets, the impact of today's Fed comments and what Putin's threat to Ukraine actually means for investors.
Lastly, Rich Bernstein, Richard Bernstein Advisors CEO, joins 'Closing Bell' to discuss today's market activity and what's been driving stocks lower.