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The biggest hedge funds have been piling into bank stocks
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Loading...The biggest hedge funds recently revealed the stocks they bought and sold after the presidential election.
The financial sector gained popularity, seeing the largest inflows during the fourth quarter, according to a new report from FactSet that tracks the 50 biggest hedge funds.
Bank of America (BAC) was the top stock pick among the financials.
“The top 50 hedge funds bought $3.5 billion worth of stock in the Financials group during the fourth quarter, which represented the largest aggregate purchase of all 11 GICS sectors,” the report said.
It continued: “Bank of America was the top buy in the group, with funds adding $1.5 billion worth of the bank’s stock. It was also the second largest purchase overall in Q4. Within the sector, the buys were widespread, with funds adding over $1 billion to each of the Diversified Financials, Insurance, and Banks industry groups. S&P Global and Marsh & McLennan were the largest hedge fund purchases in the Financials sector, after Bank of America.”
Financial stocks rallied following the election of Donald J. Trump on expectations for corporate tax cuts and deregulation.
Daniel Loeb’s Third Point LLC’s made a nearly $1 billion bet on financials. Loeb’s biggest buys included JPMorgan Chase (JPM) and Bank of America. Loeb snapped up 5.25 million shares of JPMorgan, a position valued at $453 million at the end of the fourth quarter. JPMorgan was Third Point’s fifth largest stock holding at the end of 2016. Loeb bought 7.5 million shares of Bank of America, a position valued at $386.7 million at the end of the quarter. He also initiated a new position in Goldman Sachs (GS) valued at just over $95 million at the end of 2016.
In Third Point’s fourth quarter letter dated Feb. 1, Loeb explained that his fund increased its exposure to financial stocks right after the election of Donald J. Trump. He noted that his fund continued to increase its exposure to financials in January.
What’s more, Loeb’s bullishness on financials doesn’t have to do with corporate tax cuts or deregulation. Instead, it’s focused on interest rates.
Julian Robertson’s Tiger Management bought Bank of America and Citigroup. “Tiger cub” Philippe Laffont’s tech-focused hedge fund Coatue Management snapped up new positions in Bank of America and JPMorgan Chase. Coatue also bought 13.2 million shares of The Financial Sector SPDR ETF (XLF). Another “Tiger Cub,” Blue Ridge Capital, led by John Griffin, bought Bank of America, Wells Fargo (WFC), and Citigroup. Blue Ridge increased its Citigroup (C), adding 366,200 more shares, bringing its total stake of just over 5.56 million shares.
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