Goldman Sachs: These are the 17 'smart money' stocks most loved by hedge funds right now — a group that's historically beaten the S&P 500

  • Hedge funds are pivoting back to growth stocks, according to a note from Goldman Sachs.
  • Below is a list of the stocks most frequently found in the top 10 holdings of hedge funds right now.
  • It’s a group that’s outperformed its benchmark on a quarterly basis over the past 20 years.

For much of this year, it’s been a downward spiral for the stock market. But the tides may be turning.

Funds are gradually pivoting back to market-leading growth stocks by moving into the information technology and consumer discretionary sectors while reducing exposure to energy and materials, according to an August 23 note from Goldman Sachs

While the average equity hedge fund has lost 9% year-to-date, July saw a 4% gain as fortunes shifted slightly, Goldman found. 

Investors seeking to follow this so-called smart money can take a peek at the stocks that appear most frequently in the top 10 holdings of hedge fund portfolios. This is exactly what the Goldman Sachs Hedge Fund VIP List (GSTHHVIP) tracks. It compiles a basket of the top long positions held by fundamentally-driven hedge funds. It’s heavily weighted in the information technology sector, which makes up 33.8% of the fund, followed by communications services at 15.7%, and then health care at 12.2%.

This year has been a tough ride for growth stocks and it has reflected on the list’s performance. Year-to-date, the GSTHHVIP has underperformed the S&P 500’s broader market exposure.

However, in the long run, it has outperformed the index in 59% of quarters since 2001, signaling strong performance if you can ride out the volatility.

Of the 50 stocks in the basket, below is a list of the top 17 held by hedge funds that have 10 to 200 distinct US equity positions as of June 30, 2022. 

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