"Hello AIG Goodbye Apple" Say The Hedge Funds

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February 21, 2013 - 6:28pm

By FinancialPostHedge funds are more bullish on equities than they have been in six years and American International Group Inc. replaced Apple Inc. as the top-held stock, according to Goldman Sachs Group Inc.Net long exposure to stocks in hedge funds climbed to 52 percent in the fourth quarter, matching the 10-year high reached in the first quarter of 2007, a team led by Goldman Sachs’ Amanda Sneider and David Kostin said in a report yesterday. For the first time in three years, iPhone maker Apple was not the most-popular stock held by firms, falling to third place as insurer AIG became the most-held position.Hedge funds notably reduced holdings of underperforming long-time favorites Apple and gold while raising allocations to rallying financials,” Sneider and Kostin wrote.Hedge funds increased bets stocks will advance after returns failed to keep pace with the rally in equities last year as short sales limited gains. While the Standard & Poor’s 500 Index jumped 16 percent in 2012 including dividends, the average hedge fund returned 8 percent, according to Goldman Sachs. The average mutual fund focused on large companies returned 14 percent, the note said.

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