As I travel around and visit with a growing number of Morgan Stanley accounts, it has become clear to me that hedge fund managers — particularly emerging ones with limited assets — are increasingly trafficking in smaller-capitalization US stocks. But it helps to get a second opinion. To this end, my colleague Bill Smith built a database of hedge fund 13F filings. What we found is that hedge fund ownership of mega/large-cap stocks has fallen to 36% in 4Q05 from 48% in 1Q99. Probably more interesting to the typical man on the street, however, is that there is a lot of money to be made by tracking which specific stocks hedge funds own.Wednesday, May 23, 2007
US Portfolio Strategy
As I travel around and visit with a growing number of Morgan Stanley accounts, it has become clear to me that hedge fund managers — particularly emerging ones with limited assets — are increasingly trafficking in smaller-capitalization US stocks. But it helps to get a second opinion. To this end, my colleague Bill Smith built a database of hedge fund 13F filings. What we found is that hedge fund ownership of mega/large-cap stocks has fallen to 36% in 4Q05 from 48% in 1Q99. Probably more interesting to the typical man on the street, however, is that there is a lot of money to be made by tracking which specific stocks hedge funds own.