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Niccolo Conte
2024-06-25 13:22:32
www.visualcapitalist.com
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The Most Popular Stocks in Hedge Fund Portfolios
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In 2023, hedge funds managed over $4 trillion in assets, hitting a record high.
While the industry saw tepid returns over much of the last decade, it has seen a resurgence in interest amid a rising rate environment. Often, hedge funds cater to an investor base of pension funds, high-net worth investors, and university endowments.
The above graphic shows the most popular hedge fund investments, based on 13F filings via WhaleWisdom.
The Top Hedge Fund Investments
Overall, Microsoft stands as the most popular company, with 874 hedge funds holding the stock.
As the megacap ramps up its AI offerings, it is capturing significant interest from hedge funds. In 2024, Microsoft shares are up over 20% as of June 24, sitting near all-time highs. Like Microsoft, a substantial share of hedge funds hold big tech stocks such as Amazon, Alphabet, and Nvidia.
Here are the most commonly held stocks in hedge fund portfolios as of the first quarter of 2024:
| Rank | Company | Share of Hedge Funds Holding the Stock |
Number of Hedge Funds Holding the Stock |
|---|---|---|---|
| 1 | Microsoft | 44% | 874 |
| 2 | Amazon | 42% | 835 |
| 3 | Alphabet Class A | 38% | 745 |
| 4 | Apple | 36% | 714 |
| 5 | Meta | 36% | 710 |
| 6 | Nvidia | 34% | 675 |
| 7 | Alphabet Class C | 32% | 631 |
| 8 | Visa | 31% | 617 |
| 9 | JPMorgan Chase & Co | 29% | 570 |
| 10 | Berkshire Hathaway Class B |
28% | 564 |
| 11 | Mastercard | 26% | 521 |
| 12 | UnitedHealth Group | 26% | 518 |
| 13 | Johnson & Johnson | 26% | 517 |
| 14 | ExxonMobil Corp | 25% | 499 |
| 15 | Eli Lilly & Co. | 25% | 498 |
Ranking in fourth is Apple, with 36% of hedge funds investing in the company.
On a net basis, hedge funds added over 26 million shares of Apple to their portfolios over the quarter, the highest among the group. Hedge funds are increasingly warming up to the stock ahead of Apple introducing AI enhancements to its iPhones this year or in 2025.
By contrast, hedge funds made the greatest reductions in Nvidia and Alphabet on a net basis. Michael Burry’s Scion Asset Management LLC was among the hedge funds that sold Alphabet Class A shares, in addition to Amazon shares.
Thanks to big tech’s outsized role in driving stock market gains, hedge funds have broadly increased their exposure to companies tied to AI technologies over the last year. A separate analysis from Goldman Sachs found that 20% of the total net market value of hedge fund investments were in the Magnificent Seven in August 2023. This marked a record level of exposure to these companies.
Beyond tech giants, a large number of hedge funds hold shares of Visa, JPMorgan Chase & Co, and Berkshire Hathaway. Over the last decade, many of these financial heavyweights have seen strong returns, including Visa returning nearly 19% on average annually. Meanwhile, JPMorgan Chase & Co witnessed over 16% average returns over the same period.
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