Shared favorites — stocks eyed by both mutual and hedge funds have revealed higher annualized returns since 2013 compared to stocks only liked by either one of the two investor types, strategists led by David Kostin wrote in a May 31 report. They have generated an annualized return of 19% since 2013, higher than the S&P 500′s 13% gain over the same period.
Currently, stocks popular with both groups include Adobe Inc., Delta Air Lines Inc., PayPal Holdings Inc., and Visa Inc.
Amidst on-going trade wars between the United States and China, Goldman and Sachs report an impressive 16% return from year-to-date stocks — thankful for company’s equally remarkable portfolio that pushed it to investors’ shared favorites.
Its portfolio including Adobe, Citigroup, Google parent Alphabet, PayPal, UnitedHealth, Mastercard, ServiceNow, Delta Air Lines Inc., and Visa have outperformed the S&P 500 by 6.1 percentage points so far in 2019, Goldman Sachs said in a statement. Notably, ServiceNow surged a massive 18% in the past month on strong first-quarter earnings.
The S&P 500, which has returned about 10% year-to-date, lost more than 6% in May alone due to the ongoing U.S.-China trade war. Situations only grew worse after the U.S. announced a 5% tariff on all Mexican imports last week.
Meanwhile, some of the stocks included in Goldman’s list are also weighing down its success due to the escalated trade tensions — but at least, shares including Visa, UnitedHealth, PayPal and Mastercard all held up well in May.
“The underperformance of popular positions today following President [Donald] Trump’s announcement of tariffs on imports from Mexico underscores investor concern about crowded positions,” Goldman’s chief U.S. equity strategist, David Kostin, said in the note. “The ‘wisdom of the crowds’ can be a positive signal for subsequent stock returns.”
Goldman covers 880 hedge funds with $2.1 trillion of gross equity positions and 521 large-cap mutual funds with $2.1 trillion of equity holdings.