Top hedge fund stocks: Here are their most popular picks
One of the best ways to discover what investment managers and hedge funds are buying in their portfolios is to dig up their Form 13F. The form must be filed with the Securities and Exchange Commission (SEC) each quarter if the investor manages $100 million or more at the end of the quarter. It’s a great resource to see what stocks some smart investors think are attractive.
Here’s the most recent data for top hedge-fund stocks.
The most popular stocks at hedge funds
Below are the most widely held stocks at hedge funds by total value, and the table also includes the number of hedge funds that hold each stock.
| Company (ticker) | Total value held | Total hedge funds |
|---|---|---|
| Source: HedgeFollow, as of start of first quarter 2024 | ||
| Apple (AAPL) | $1.05 trillion | 744 |
| Microsoft (MSFT) | $1.01 trillion | 939 |
| Amazon (AMZN) | $500.1 billion | 855 |
| NVIDIA (NVDA) | $423.6 billion | 684 |
| Alphabet (GOOGL) | $307.8 billion | 795 |
| Meta Platforms (META) | $302.4 billion | 736 |
| Alphabet (GOOG) | $252.8 billion | 689 |
| Visa (V) | $205.3 billion | 648 |
| Tesla (TSLA) | $198.6 billion | 442 |
| Unitedhealth Group (UNH) | $196.3 billion | 574 |
It may not be too surprising that the most popular stocks among hedge funds coincide heavily with the top stocks in the Standard & Poor’s 500 Index. The largest stocks offer significant liquidity for investors, and hedge funds have a lot of money to put to work in their investments. But the top companies such as the Magnificent 7 stocks also offer significant room for growth.
And Alphabet’s double appearance above? The company has multiple share classes of its common stock, and they’re widely held enough that they both appear in the top 10 above.
Should you follow hedge funds into their top stocks?
Hedge funds may be a great place to mine for an attractive investment, since they may employ some serious brain power. And if you see a stock that a number of smart funds are gravitating to, it may be worth doing your own research to see if it’s interesting. (Here’s how to get started.)
The list above certainly contains some world-beating companies that have delivered outstanding returns so far, but the real question is whether they’ll do so in the future. And you’ll need to have done your own research to have confidence that the future looks prosperous for them.
You can wind up in serious trouble if you blindly follow a hedge fund into an investment. Funds buy and sell stocks all the time and for many different reasons. They may open a small position in one quarter and then close it immediately for reasons that they do not disclose. Even Warren Buffett’s Berkshire Hathaway – sometimes a long-term holder – trades in and out of stocks.
If you’re simply following their moves, you won’t know why they’re acting as they do, and you won’t know if a stock’s rise or decline is a chance to buy more of it or sell it. When many funds pile into a stock, especially a small-cap or mid-cap, it quickly becomes what’s called a “hedge fund hotel.” The stock can be whipsawed, if funds begin to sell it en masse. If you didn’t do your own research, you may be left holding the bag and wondering why everyone is checking out.
Turning to one of the best online brokers for research can help you make smart decisions.
Bottom line
Hedge fund investments can be a great starting point for finding attractive investments, but you’ll need to do a lot of work from there to vet the stock for your own portfolio. For many investors, buying an S&P 500 index fund ends up being easier – and still generates strong returns.
