In the "historic level" second quarter, how did hedge funds operate? Microsoft bought the most, Alibaba reduced its holdings the most
According to the 13F reports of 716 hedge funds for the second quarter, Microsoft became the most favored target in Q2, with fund holdings increasing by $12 billion to $47 billion, and Bridgewater became the largest buyer of Microsoft; meanwhile, Chinese concept stock Alibaba faced the largest scale reduction, with the value of holdings decreasing by $1.55 billion, led by Bridgewater in the sell-off. From an industry allocation perspective, technology stocks accounted for the largest weight in their investment portfolio at 23%, followed by financial stocks at 17%
In what the market calls "historic levels," hedge funds made significant bets on tech giants like Microsoft in the second quarter, while Chinese concept stock Alibaba faced large-scale reductions in holdings.
Despite the market turbulence triggered by Trump's tariff policy in early April, the U.S. stock market rebounded strongly afterward. The S&P 500 index recorded its best quarterly performance since December 2023, soaring about 25% from its April low, while the Nasdaq 100 index achieved its best gain in over two years.
Amidst the intense market volatility, hedge funds made large-scale adjustments to their positions. According to Bloomberg's analysis of the 13F reports from 716 hedge funds for the second quarter:
Microsoft became the most favored target, with fund holdings increasing by $12 billion to $47 billion; meanwhile, Chinese concept stock Alibaba experienced the largest reduction in holdings, with a decrease in value of $1.55 billion.
Data shows that the total holdings of the 716 hedge funds increased from $622.94 billion three months ago to $726.54 billion. In terms of industry allocation, tech stocks accounted for the largest weight in their portfolios at 23%, followed by financial stocks at 17%.
Microsoft Becomes the Largest Holding, Alibaba Sees the Largest Reduction
In the restructuring of investment portfolios in the second quarter, tech stocks received significant increases from hedge funds. Microsoft, valued at $46.83 billion, became the most valuable asset held by hedge funds, with holdings growing by $12 billion to $47 billion compared to the first quarter.
Among them, Bridgewater became the largest buyer of Microsoft, adding 905,600 shares, followed closely by Walleye Capital, which increased its holdings by 882,900 shares.
The substantial increase in the value of hedge fund holdings in Microsoft came from both net purchases and the company's soaring stock price. Driven by the artificial intelligence concept, Microsoft's stock price recorded significant gains in the second quarter, providing investors with substantial returns.
Additionally, Netflix was also in high demand, reflecting hedge funds' continued confidence in high-growth sectors such as streaming and cloud computing.
Chinese tech giant Alibaba became the stock with the largest reduction in holdings among hedge funds in the second quarter, with a decrease in market value of $1.55 billion. Bridgewater led the reduction, selling 5.66 million shares, while Coatue Management also reduced its holdings by 2.93 million shares.
This trend of reduction reflects hedge funds' cautious attitude towards Chinese concept stocks.
Tech Stocks Account for the Largest Weight in Portfolios
From an overall allocation perspective, tech stocks accounted for the largest weight in hedge fund portfolios at 23%, demonstrating investors' confidence in the long-term growth prospects of the tech industry. Financial stocks ranked second with a weight of 17%, reflecting optimistic expectations regarding the interest rate environment and economic recovery.
In contrast, the energy sector saw the least growth in investment value. Arrowstreet Capital LP reduced its holdings in Petrobras by 21.2 million shares, marking the largest reduction for the investment group, while Oaktree Capital Management LP also reduced its holdings by 2.66 million shares.
**In terms of individual stock operations, Amazon received increases or new positions from 177 investment institutions, becoming the most favored stock among institutions. In contrast, Meta Platforms was reduced or completely sold off by 147 investors, making it the most sold stock **
It is worth noting that in the face of a nearly 40% sharp decline in UnitedHealth Group's stock in the second quarter, investment guru Warren Buffett and hedge fund mogul David Tepper chose to go against the trend and significantly bought shares of this healthcare giant. This move reflects the strategy of seasoned investors seeking value investment opportunities during market panic
