A Look Inside Hedge Fund Holdings May Tell Us Where The ‘Smart Money’ Thinks Stocks Are Headed

A Look Inside Hedge Fund Holdings May Tell Us Where The ‘Smart Money’ Thinks Stocks Are Headed

Article Summary

  • The top 50 hedge funds were overweight on large cap materials and consumer discretionary stocks for the 4th quarter.
  • Hedge funds added 1% equity exposure to their portfolios for the 4th quarter.
  • An under-weighted portfolio in small cap stocks implies fund managers expect muted stock gains in 2015 compared to 2014.

There’s a lot of different methods investors use to gauge the market’s direction. Charts can reveal trading patterns, ratios give way to valuations, and macroeconomic analysis can predict future trends.

Another way to get an idea of what’s happening is to simply look at what the institutional money is doing. And the highest echelon of institutional money management is the hedge fund…

 

Read full article at Seeking Alpha
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