Narrow market proving a headwind for mutual funds, opportunity for hedge funds

seekingalpha2023-06-06

Goldman Sachs is the latest Wall Street bank to weigh in on the narrowness of the 2023 rally that has brought the S&P 500 nearly 300 points above their year-end target. Goldman has a 4,200 target for ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2341520398?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1495454858/image_1495454858.jpg","is_english":true,"pubTime":"2023-06-06 18:42","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2341520398","market":"us","top_or_hot":-1,"title":"Narrow market proving a headwind for mutual funds, opportunity for hedge funds","media":"seekingalpha","content":"<div>\n<p>Goldman Sachs is the latest Wall Street bank to weigh in on the narrowness of the 2023 rally that has brought the S&P 500 nearly 300 points above their year-end target. Goldman has a 4,200 target for ...</p>\n\n<a href=\"https://seekingalpha.com/news/3977589-narrow-market-a-headwind-for-active-mutual-funds-opportunity-for-hedge-funds\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Narrow market proving a headwind for mutual funds, opportunity for hedge funds</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNarrow market proving a headwind for mutual funds, opportunity for hedge funds\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-06 18:42 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3977589-narrow-market-a-headwind-for-active-mutual-funds-opportunity-for-hedge-funds><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Goldman Sachs is the latest Wall Street bank to weigh in on the narrowness of the 2023 rally that has brought the S&P 500 nearly 300 points above their year-end target. Goldman has a 4,200 target for ...</p>\n\n<a href=\"https://seekingalpha.com/news/3977589-narrow-market-a-headwind-for-active-mutual-funds-opportunity-for-hedge-funds\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BBT3K403.USD","symbol_name":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/news/3977589-narrow-market-a-headwind-for-active-mutual-funds-opportunity-for-hedge-funds","article_id":"2341520398","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1495454858/image_1495454858.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2341520398","pubTimestamp":1686048120,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Goldman Sachs is the latest Wall Street bank to weigh in on the narrowness of the 2023 rally that has brought the S&P 500 nearly 300 points above their year-end target. Goldman has a 4,200 target for ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","BK4018":"居家用品","BK4177":"软饮料","LU1935042991.SGD":"MANULIFE GF GLOBAL MULTI-ASSET DIVERSIFIED INCOME  \"AA\" (SGDHDG) INC","BK4533":"AQR资本管理(全球第二大对冲基金)","SG9999014559.SGD":"United Income Focus Trust Dis SGD","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4566":"资本集团","BK4558":"双十一","LU0097036916.USD":"贝莱德美国增长A2 USD","LU1032466523.USD":"高盛全球多资产收益组合Acc","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU1267930573.SGD":"TEMPLETON GLOBAL \"AA\" (SGD) ACC A","LU0882574055.USD":"富达全球健康医疗A ACC","FI":"费哲金融服务","SPY":"标普500ETF","BK4568":"美国抗疫概念","LU0266512127.USD":"摩根大通环球自然资源 A(acc)","LU0444971666.USD":"天利全球科技基金","LU0456854461.SGD":"JPMorgan Funds - Global Natural Resources A (acc) SGD","BK4134":"信息科技咨询与其它服务","IE00BFTCPJ56.SGD":"Janus Henderson Global Life Sciences A Acc SGD","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU2286300806.USD":"Allianz Cyber Security AT Acc USD","GOOG":"谷歌","BK4581":"高盛持仓","LU1732799900.SGD":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","LU0528227936.USD":"富达环球人口趋势基金A-ACC","LU0889566641.SGD":"FTSF - Templeton Shariah Global Equity A Acc SGD","PG":"宝洁","SSO":"两倍做多标普500ETF","SG9999014575.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USDHDG) INC","BK4127":"投资银行业与经纪业","BK4170":"电脑硬件、储存设备及电脑周边","LU1506573853.SGD":"MANULIFE GF GLOBAL EQUITY \"AA\" (SGD) INC","LU0072462426.USD":"贝莱德全球配置 A2","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","LU2237443382.USD":"Aberdeen Standard SICAV I - Global Dynamic Dividend A MIncA USD","BK4528":"SaaS概念","BK4201":"综合性石油与天然气企业","LU0266013472.USD":"AXA WF - Framlington Longevity Economy A Cap USD","LU1093756325.SGD":"FTIF - Franklin K2 Alt Strat Fd A (acc) SGD-H1","ABBV":"艾伯维公司","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","BK4532":"文艺复兴科技持仓","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD"},"translate_title":"市场狭窄对共同基金不利，对对冲基金有利","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ABBV":1,"PG":1,"FI":1,"FISV":1,"SPY":0.9,"GOOG":0.84,"SSO":0.6,"ESmain":0.6},"content_text":"Goldman Sachs is the latest Wall Street bank to weigh in on the narrowness of the 2023 rally that has brought the S&P 500 nearly 300 points above their year-end target. Goldman has a 4,200 target for the S&P (SP500) (NYSEARCA:SPY) (IVV) (VOO) for the end of this year.  But its equity team notes that investor enthusiasm \"about the potential benefits to companies from AI has lifted the index ... despite uncertainty on the timing and magnitude of the adoption of AI.\" \"The seven largest constituents have surged 53% vs. just 0% for the remaining 493 stocks,\" strategist David Kostin wrote in a note. Nvidia (NVDA), Alphabet (GOOGL) and Microsoft (MSFT), \"which our analysts view as leading beneficiaries of the AI revolution, have soared by 172%, 40%, and 39% YTD,\" Kostin said. \"Excluding these 3 stocks, the S&P 500 P/E multiple would be 1x lower and closer to our forecast than at the current valuation of 18x.\" Hedge funds and mutual funds have lagged the S&P's 12% year-to-date performance. Long/short equity hedge funds are up 3% and the average large-cap mutual fund is up 7%.  Mutual fund challenges \"The market’s extremely narrow YTD rally has been a significant headwind to mutual fund performance,\" Kostin said. \"The largest tech stocks (Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), Tesla (TSLA), Meta (META)) have returned 53% YTD vs. just 0% for the remainder of the S&P 500.\" \"The average large-cap mutual fund is 721 bp underweight this group of stocks, which was the major contributor to mutual fund underperformance. The largest tech stocks were a 236 bp drag on the performance of the portfolio of the average mutual fund relative to the Russell 1000 (NYSEARCA:IWB). Excluding the largest tech stocks, the portfolio of the average mutual fund outpaced the Russell 1000 index by 36 bp.\" \"The average large-cap growth fund holds a 27% weight in these 7 stocks, 15 pp lower than the staggering 42% weight of these stocks in the Russell 1000 Growth index (NYSEARCA:IWF),\" Kostin said. \"SEC diversification requirements prevent many growth funds from holding benchmark weights in these stocks.\" \"The average growth fund in compliance with diversification requirements trails the Russell 1000 Growth index by 7 pp YTD (14% vs. 21%). However, growth funds in violation of SEC diversification requirements are outpacing the growth benchmark by 1 pp on average (22% vs. 21%).\"  Hedge fund tailwinds \"In contrast, mega-cap tech has been a performance tailwind for hedge funds,\" Kostin said. \"The largest tech stocks have been long-standing favorite long positions among hedge funds.\" \"MSFT sits atop our list of Hedge Fund VIPs, followed by AMZN and META,\" he said. \"Other mega-cap favorites, including GOOGL, AAPL, and NVDA, rank among the 10 most important holdings. Our Hedge Fund VIP basket has outperformed the S&P 500 by 5 pp YTD (17% vs. 12%). But index hedges and a record overweight tilt in Health Care (-5% return YTD) have detracted from hedge fund performance.\" \"Hedge funds cut their exposure to Info Tech by 538 bp and became incrementally more underweight in 10 of the 12 subsectors relative to the Russell 3000 (NYSEARCA:IWV). The seven mega-cap tech stocks accounted for 10% of hedge fund long equity assets at the start of 2Q 2023, the largest share since at least 2007. However, META, AAPL, and MSFT were among the TMT stocks with the largest net decrease in hedge fund ownership during 1Q.\" Picks and pans These stocks cross over with Goldman's hedge fund and mutual fund baskets. Hedge Fund VIP List Long Positions and Mutual Fund Overweights:  Fiserv (FISV) Humana (HUM) Mastercard (MA) ServiceNow (NOW) Palo Alto Networks (PANW) Uber (UBER) UnitedHealth (UNH) Visa (V) Workday (WDAY)  Hedge Fund VIP List Short Positions and Mutual Fund Underweights:  AbbVie (ABBV) Boeing (BA) Costco (COST) Chevron (CVX) Disney (DIS) Ford (F) Home Depot (HD) IBM (IBM) Intel (INTC) Johnson & Johnson (JNJ) Coca-Cola (KO) McDonald's (MCD) Moderna (MRNA) Realty Income (O) PepsiCo (PEP) Pfizer (PFE) Procter & Gamble (PG) Starbucks (SBUX) Thermo Fisher (TMO) Tesla (TSLA) Verizon (VZ) ExxonMobil (XOM)  More on funds  Long-only funds haven't bought into AI yet - Wells Fargo Templeton Dragon Fund: Time To Nibble Again Investors take back $2B worth of fund assets on the week","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2341520398"}