This post is divided in two clear parts. The first one shows what according to the latest set of 13F filings, were the most popular stocks within the hedge fund community.
According, to Goldman, among the entire universe of publicly traded US stocks, the list of 50 names that have the largest number of hedge fund investors are the following.
A slightly different angle on the same data is shown in the next chart: it shows which stocks matter the most to hedge funds, or the 50 stocks that appears the most frequently among the top 10 holdings of hedge funds. This is, for lack of a better wordl, the "hedge fund hotel" as of December 31.
However, as Goldman admits, the "high hedge fund concentration strategy has historically worked best in an upward-trending market." In other words, everyone rushing into the same stocks is anything but a "hedge" and is really just a beta chasing play, in most cases with lots of leverage.
Indeed, as we showed earlier, to outperform the market, the stocks that worked are those that have the lowest hedge fund concentration...
... such as these.
And while as we also noted this morning most hedge funds have had a poor 2015 and an even more abysmal start to 2016...
... some have actually made money.
Which brings us to the second part of this post.
In a special report focusing on hedge fund performance, Bloomberg writes that there were bright spots in the 2015 hedge fund arena: "many long-term holdings paid off and some managers made well-timed buys, while others combed through small-caps or illiquid securities to find opportunities for arbitrage. Even some funds that didn't perform particularly well were diversified or hedged enough to protect their investors from the worst of the "downside," in a year that had plenty of it."
And while we know that most hedge funds underperformed substantially in 2015, here are the 50 hedge funds which according to Bloomberg performed the best in 2015. We can't help but be amused that among the top performers are several names whose only strategy is HFT-based orderflow frontrunning. We'll leave it up to readers to find which Bernanke-advised hedge funds we are talking about.