Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How You Can Buy the Same Stocks as Elite Hedge Funds

InvestorEducation / Learning to Invest Oct 29, 2019 - 03:40 PM GMT

By: Robert_Ross

InvestorEducation I’m sure you’ve heard of hedge funds, maybe on shows like Billions or in movies like The Big Short.

Hedge funds are a special type of investment company. They pool money from many investors and use complex strategies to invest, often aggressively.

Most people can’t invest in hedge funds—only high-net-worth individuals and institutional investors. So it seems like every time you read about these funds, there’s some really rich guy in the story, flying around on private jets, making splashy deals.



But those popular images are largely myth.

The ho-hum performance of the average hedge fund simply doesn’t back it up. In fact, over the last five years, you could have beaten 9 out of 10 hedge funds by just buying the S&P 500.

Since 2014, the Barclay Hedge Fund Index has returned 3.4% annually, barely beating US government bonds. And it severely lagged behind the S&P 500, which has grown 10.7% annually during that period.

If you look back 10 years, it’s the same story:



That said, a small group of elite hedge funds absolutely crush the market, earning annual returns in the neighborhood of 15% to 20%.

Even better, you can buy some of the same stocks they do (without taking on huge risks inappropriate for income investors).

The Best Funds Aren’t the Ones You’ve Heard Of

Overall, hedge funds managed $3.2 trillion last year.

Some of the best-known hedge funds, like Ray Dalio’s Bridgewater Associates, manage over a hundred billion in assets. But over the past five years, these mega-funds have underperformed both the S&P 500 and their smaller competitors.

Take Crawford Lake Capital Management, for example. This small, elite fund manages $1 billion in assets. Since 2014, it’s returned more than 14.1% per year, significantly outperforming the S&P 500 (10.7%).

Tiger Global Management is another top-tier hedge fund. It manages $36 billion in assets, and it’s returned 22.3% annually over the last three years.

There’s also Anson Funds Management LP, which manages $548 million. The fund has returned 11.7% annually since 2007—nearly double the S&P 500 over the same period.

It’s very difficult to consistently beat the market by this much. But these guys aren’t doing magic tricks. We’ll take a look at what they’re buying in a moment.

Tracking the Whales

One of the best ways to track hedge funds is the Bank of America Merrill Lynch Global Fund Manager Survey. It includes 224 funds with over half a trillion in assets under management.

Here’s the most recent survey. It shows that hedge funds are buying utilities, staples, and telecom stocks right now.



The Global Fund Manager Survey is a great way to see where the overall hedge fund industry is moving. But you can go a step further.

Remember those three funds I mentioned earlier? They all disclose their top holdings each quarter.

You Don’t Need Hedge Fund Access to Buy These Three Stocks

Hedge funds have to file something called Form 13F. These filings show each fund’s top holdings. They even show how much the funds allocate to each stock.

For instance, Crawford Lake, one of the elite funds I mentioned earlier, has 15% of its assets in The Walt Disney Co. (DIS).

Disney is a diversified media juggernaut. It owns globally recognized brands, including Marvel, LucasFilm, and ESPN. It also owns theme parks around the world. Plus, it launched a streaming service recently called Disney+ to compete with Netflix.

Disney is also a consistent dividend payer. It’s raised its dividend for fourteen straight years and sports a 1.4% dividend yield.

Meanwhile, Tiger Global Management has 11.1% of its assets in Microsoft Corp. (MSFT).

Microsoft is one of the largest companies in the world and the dominant player in consumer and enterprise software. It has a wide product portfolio, including premier operating system Windows, Xbox entertainment systems, and professional network LinkedIn.

Microsoft pays a safe 1.5% dividend, and it’s increased its payout for 14 years in a row.

We also talked about Anson Funds Management LP. While over half of the fund’s assets are shorting the S&P 500, 3.1% of its holdings are in Barrick Gold Corp. (GOLD).

Barrick is one of the world’s largest gold producers. Gold is considered a safe haven asset, and investors buy gold stocks when they think stock market volatility is rising. Barrick also pays a decent 1.0% dividend.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in