Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Prominent hedge fund managers appeared to make big second-quarter bets that the U.S. economy would continue to expand despite increasing concerns about a broadening trade dispute between the United States and China, regulatory filings showed Tuesday.

Third Point added new positions in payment companies PayPal Holdings Inc and Visa Inc, both of which are up more than 19 percent year to date. Greenlight Capital, run by billionaire investor David Einhorn, added new positions in low-to-middle income retailers including Dollar Tree Inc , Dollar General Corp, Gap Inc, and TJX Companies Inc, the parent company of discount retailers TJ Maxx and HomeGoods.

Activist fund Jana Partners added shares of broad-based exchange-traded funds that track the S&P 500 and the Russell 2000 indexes and took new positions in Wells Fargo & Co and food delivery company GrubHub Inc.

Story continues below advertisement

The flurry of new positions in cyclical companies came during a quarter in which U.S. gross domestic product increased at an annual rate of 4.1 per cent, nearly double the 2.2-per-cent rate of the first quarter of the year, according to Commerce Department estimates.

A rally in cyclical companies would help boost hedge fund industry returns at a time when many fund firms are under pressure from investors to lower their fees or improve their performance. Hedge funds, on average, are up 1.5 per cent since the start of January, according to research firm Hedge Fund Research, well behind the 6.2-per-cent gain in the benchmark S&P 500 index over the same time.

“Everyone is comparing everything to the S&P 500 and that’s a very difficult hurdle for the last few years,” said Sol Waksman, president of research firm BarclayHedge.

Quarterly disclosures of hedge fund managers’ stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are one of the few public ways of learning what the managers are selling and buying. But relying on the filings to develop an investment strategy comes with some risk because the disclosures come 45 days after the end of each quarter and may not reflect current positions. Still, the filings offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side.

The filings do not disclose short positions, or bets that a stock will fall in price. As a result, the public filings do not always present a complete picture of a management firm’s stock holdings.

TRIMMING THE FAANGS

Large hedge fund managers cut their positions in some of the so-called FAANG stocks - the moniker given to Facebook Inc , Apple Inc, Amazon.com Inc, Netflix Inc , and Google-parent Alphabet Inc - that led the market higher last year.

Story continues below advertisement

Third Point added new positions in payment companies PayPal Holdings Inc and Visa Inc, both of which are up more than 19 per cent year to date. Greenlight Capital, run by billionaire investor David Einhorn, added new positions in low-to-middle income retailers including Dollar Tree Inc , Dollar General Corp, Gap Inc, and TJX Companies Inc, the parent company of discount retailers TJ Maxx and HomeGoods.

Omega Advisors, meanwhile, sold all of its position in Netflix and added new holdings in biotechnology companies including Madrigal Pharmaceuticals Inc and Deciphera Pharmaceuticals Inc.

A number of prominent fund managers sharply cut their stake in Apple only weeks before it became the first publicly traded U.S. company to be worth more than $1 trillion.

Einhorn’s Greenlight Capital slashed its stake by 77 per cent, while Philippe Laffont’s Coatue Management got rid of 95 percent. Advisory firm Diamond Hill Capital Management cut its stake by 27 per cent. Other big holders, including Sanders Capital and Adage Capital Partners, trimmed only small amounts in the second quarter.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies