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A Google search page is seen through a magnifying glass in this photo illustration taken in Berlin, Aug. 11, 2015.Pawel Kopczynski/Reuters

Alphabet Inc. is the most widely held company in mutual funds, according to a Citi research report.

The tech giant also tied with Allergan PLC for the No.1 holding in hedge funds, said analyst Tobias Levkovich after a screening the top-10 holdings of the 50 largest actively managed mutual funds and hedge funds by asset size to identify over- and under-owned large-cap companies.

His research found health care and information technologies companies were favoured.

"Overall, the portfolio of top holdings for mutual funds (0.9 per cent) outperformed the S&P 500 in 1Q," said Mr. Levkovich. "While Verizon Communications was the standout performer of the group, shares of Bank of America (down 19.7 per cent) declined the most in the quarter. On average, mutual funds saw the best performance from the top-10 holdings in Telecom Services while top-10 holdings within financials and health care underperformed.

"During the first quarter, the portfolio of 50 of the hedge fund's top-10 stocks fell 1.7 per cent since the end of 2015, while the S&P 500 improved 0.8 per cent in 1Q16. On average, hedge funds saw the best performance from the top-10 holdings in consumer staples and consumer discretionary. Energy, health care and financials holdings underperformed the S&P 500 return in 1Q16.

Following Alphabet in mutual fund representation were Microsoft Corp.; Amazon.com Inc., JPMorgan Chase & Co., General Electric Co., Facebook Inc., Apple Inc., Wells Fargo & Co, Home Depot Inc. and Pfizer Inc.

At hedge funds, the most-owned S&P 500 names were Allergan, Alphabet, Charter Communications Inc., Facebook, Time Warner Cable Inc., Microsoft, Apple, Amazon.com., Pfizer, Pepsico Inc.

"For 2016, market trends should be driven by a 5-per-cent-type earnings pickup," said Mr. Levkovich. "Admittedly, U.S. credit conditions are more mixed (primarily energy sector driven), with disappointment also coming from emerging economies and a lacklustre though improving Europe holding back the earnings story from powerful expansion, though we anticipate better year-over-year EPS trends in 2H16 given easier energy comps and the recently weaker U.S. dollar.

"Commodity prices still are acting as a drag on aggregate corporate profits as industrial companies scale back while Fed concerns should also restrain multiple expansion prospects. Better hiring and capital spending intentions (outside of the oil patch) are encouraging as is stock buyback activity. We remain generally constructive long term while advising investors to buy on weakness. In this respect, we are maintaining our year-end 2016 S&P 500 objective of 2,150 and our mid-2016 target of 2,100. Further, we envision restraint owing to expected EBIT margin pressures, the impact of additional Fed rate hikes and the uncertainty surrounding the US presidential elections."

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