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Hedge funds: Amazon is still the largest net weight; Apple and Tesla underweight

Published 02/11/2024, 12:34 am
© Reuters
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Investing.com -- Jefferies on Thursday unveiled the latest hedge fund portfolio updates, highlighting that Amazon (NASDAQ:AMZN) retains its position as the largest net weight.

As of August 31, Amazon accounts for 10% of the portfolio, marking it as both the largest individual holding and the top overweight, surpassing its S&P 500 weight by 6.5%.

Meta (NASDAQ:META) follows closely, with hedge funds significantly increasing its share to 8.8% of their holdings, also making it one of the highest overweight positions.

In contrast, Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) are notably underweighted. Apple’s representation stands at 2.2%, which is 4.7% below its S&P 500 weight.

Tesla's, meanwhile, has a net short standing at -2.5%, or 3.8% below the S&P 500 weight.

Overall, the portfolio reflects hedge funds’ increased exposure to their favored "Sweet 16" stocks, which reached a record 49.7% of total holdings.

“The net weight move up from 45.7% to 49.7%, and this is a new high in our dataset,” strategists noted. “This also made Hedge Funds overweight the group by 14.6%, also the largest in our dataset.”

In addition to AMZN and META, other individual stocks with noteworthy net weighting in hedge funds’ portfolios include Netflix (NASDAQ:NFLX) and Microsoft (NASDAQ:MSFT) at 7.8%, and Nvidia (NASDAQ:NVDA) at 5.5%.

Despite boosting their “Sweet 16” holdings, hedge funds trimmed their Secular Growth allocation, reducing it by 1.8% to 61.5% of the portfolio. This shift reflects a preference toward Cyclicals, which grew by 1.6%, while Bond Proxies remained net short at over 8%.

Health Care, a key part of Secular Growth, saw a notable reduction to 15.7% from 21.4%, following months of volatility. Technology also decreased by nearly 3%, now underweight relative to the S&P 500 by over 700 basis points, marking its lowest level since April 2023.

In contrast, Communication Services rose by 1.8%, becoming the portfolio's largest overweight at 13.5%.

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