The Top 50 Hedge Fund Long And Short Positions

In Goldman’s latest quarterly hedge fund trend monitor – a survey of 808 hedge funds with $2.1 trillion of gross equity positions ($1.5 trillion long and $649 billion short) – which analyzes hedge fund holdings as of Dec. 31, the bank makes some interesting observations about the current state of the hedge fund industry.

First and foremost, it finds that the “average” hedge fund is up a paltry 1% YTD as of Feb 20, underperforming the S&P for the 8th consecutive year. This follows on the heels of a 13% return for equity funds in 2017, the strongest annual absolute return since 14% in 2013

In terms of holdings, hedge funds stuck with the deflationary themes of growth and momentum despite 4Q tax and interest rate volatility. Tax reform and rising Treasury yields weighed on Technology and other fund favorites in late 4Q. Although funds trimmed their Tech overweight, Goldman found that the tech sector remains the largest net portfolio weight (24%) and the bulk of Goldman’s VIP list (38%). Financials remained the largest net underweight (-445 bp); even as hedge fund paralysis, first noted last quarter, remained as portfolio turnover hovered near record lows.

Below are Goldman’s 5 key observations from this edition of the HF Trend monitor: