As the market rebounded off the March 23 low, hedge funds’ top holdings saw a big boost from a surge in retain trading.
According to data from Goldman Sachs, the first quarter saw a big uptick in smaller investor—so-called retail investor—trading activity, with daily average trading activity rising more than twofold since the beginning of the year.
“This sharp increase in retail trading has helped a basket of popular retail stocks outperform the S&P 500 by 13 percentage points year to date,” Goldman said.
Among the most popular names that saw a boost are names that often appear in hedge funds’ top holdings, including Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), Google-parent Alphabet (NASDAQ: GOOGL, GOOG), Microsoft (NASDAQ: MSFT), and Chinese e-commerce giant Alibaba (NYSE: BABA).
Since the March 23 bottom, all five of these big-name stocks are up by double digits. Amazon is up 26% since then. Facebook is up 52%. Alphabet shares are up nearly 35%. Microsoft is up 33%. And Alibaba has gained 13%.
“As investors grappled with the largest economic collapse on record, they shifted further into already popular large-cap secular growth stocks, boosting momentum strategies,” Goldman said in its report.
But aside from these big names, Goldman identified a list of 50 “Very Important Positions” for hedge funds. This basket has outperformed the S&P 500 in 61% of quarters since 2001, Goldman’s data shows. And the firm complied the list by looking at the holdings of 822 hedge funds with $1.8 trillion in gross equity exposure.
By looking at these hedge funds’ 13F filings, the Goldman team identified VIP long positions, with names including videogame publisher Activision Blizzard (NASDAQ: ATVI), Change Healthcare (NASDAQ: CHNG), Equinix (NASDAQ: EQIX), HCA Healthcare (NYSE: HCA), Nvidia (NASDAQ: NVDA), Raytheon Technologies (NYSE: RTX), Tech Data (NASDAQ: TECD), T-Mobile (NASDAQ: TMUS), and Zynga (NASDAQ: ZNGA).