Quarterly Hedge Fund Tracker – Q4 2016
Hedge Funds Finish 2016 with a ‘Trump Effect’
This quarter’s Hedge Fund Tracker shows that the top funds managed approximately $153 billion in equity holdings, up from the $145 billion under management in Q3 and $150 billion in Q2. This is likely due to the equity market rally seen after Trump won the presidential election, as the change in positions has been negligible at 420 this quarter versus 424 in Q3.
However, this is the first quarter since Q3 2015 that we’ve seen three sectors with net buys over $1 billion. Financials led with $1.22 billion, followed by Info Tech at $1.21 billion and Industrials at $1.1 billion. It’s possible to deduce that these sectors are seeing more buying activity due to President Trump’s proposed plans for deregulation, repatriation tax, and infrastructure investment. Overall, 5 of the 11 S&P 500 sectors were net buys, up from 3 sectors in the previous quarter.
Topping the list of net sells were the Energy sector at $2.7 billion, followed by the Consumer Discretionary sector at $2.3 billion. This quarter last year, Energy was the top buy at $1.5 billion, which could suggest that Trump’s proposed environmental plans could be causing hedge funds to move away from the sector entirely.