One of the best ways to find out what investment managers and hedge funds are buying in your portfolio is by digging into your Form 13F. If an investor has more than $100 million under management at the end of the quarter, this form must be filed quarterly with the Securities and Exchange Commission (SEC). A great resource for finding out which stocks some smart investors think are attractive.
Here is the latest data on top hedge fund stocks.
Most popular hedge fund stocks
Below is a table of the stocks most widely held by hedge funds, broken down by total amount, and the table also includes the number of hedge funds that own each stock.
| Company name (ticker) | Total holding amount | Hedge fund total |
|---|---|---|
| Source: HedgeFollow, as of start of Q1 2024 | ||
| Apple (AAPL) | $1.05 trillion | 744 |
| Microsoft (MSFT) | $1.1 trillion | 939 |
| Amazon (AMZN) | $500.1 billion | 855 |
| Nvidia (NVDA) | $423.6 billion | 684 |
| Alphabet (GOOGL) | $307.8 billion | 795 |
| Metaplatform (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 all that surprising that the most popular stocks among hedge funds are closely aligned with the top stocks in the Standard & Poor’s 500 Index. The largest stocks provide investors with greater liquidity, and hedge funds have large amounts of capital available for investment. But top companies like Magnificent 7 stocks also have significant room for growth.
And the double appearance of the alphabet above? The company has multiple share classes of common stock, both of which are widely held in the top 10 listed above.
Should you follow hedge funds into the top stocks?
Hedge funds can be a great place to unearth attractive investments, as they can involve quite a bit of brainpower. Also, if you see a stock that a lot of smart funds are eyeing, it might be worth doing some research of your own to see if it’s interesting. (Here’s how to get started.)
While it’s true that the list above includes some of the world’s top companies that have generated impressive returns in the past, the real question is whether they will continue to do so in the future. And you need to do your own research to be sure the future looks prosperous for them.
Blindly following hedge funds into your investments can get you into serious trouble. Funds buy and sell stocks all the time for a variety of reasons. They may open small positions in one quarter but close them quickly for undisclosed reasons. Even Warren Buffett’s Berkshire Hathaway buys and sells stocks, in part because he’s a long-term holder.
If you simply follow their movements, you won’t know why they are doing what they do, and whether a rise or fall in a stock is an opportunity to buy more or sell that stock. I don’t understand. When stocks, especially small and mid-cap stocks, attract a lot of money, they quickly become what are called “hedge fund hotels.” If funds start selling off en masse, stocks could take a big hit. If you haven’t looked into it yourself, you might be left holding your bag and wondering why everyone checks out.
Relying on one of the best online brokers for your research will help you make a wise decision.
conclusion
Investing in hedge funds is a great starting point for finding attractive investments, but from there there’s a lot of work to be done to vet the right stocks for your portfolio. For many investors, buying an S&P 500 index fund ends up being easier and still yielding high returns.
