2Q22 Hedge Fund Handbook: Conflicting Market Signals, LT Opportunity In Growth

Today in the podcast, our takeaways from our review of the 2Q22 stock-level holdings of more than 300 hedge funds based on the 13f’s that were recently released. Three big things you need to know: First, the performance of the most popular S&P 500 stocks in hedge funds has started to weaken after initially showing some signs of stabilization in late 2Q – a potentially negative signal for the broader market in the near-term. Second, hedge funds began 3Q22 with overweights to cyclicals and commodities that were at post GFC highs, overweights to defensives that were below peak, and underweights in secular growth – something that tells us the longer-term opportunity remains in the Growth trade. Third, the performance of the most popular Russell 2000 stocks in hedge funds has started to stabilize – an admittedly conflicting, positive signal for stocks.