Big U.S. funds gorged on tech stocks and gold in second quarter: 13F filings

By Svea Herbst-Bayliss and David Randall

BOSTON/NEW YORK (Reuters) – Prominent fund managers dove into technology and consumer stocks during the second quarter, helping fuel a rally that has pushed the benchmark S&P 500 near record highs despite the economic toll of the coronavirus pandemic, regulatory filings released on Friday showed.

Their favorite bets included the so-called FAANG stocks–shares of Facebook Inc, Amazon.com Inc, Apple Inc, Netflix Inc, and Google-parent Alphabet Inc–which have accounted for bulk of the market’s gains this year. They also snapped up shares of companies such as Zoom and PayPal, whose growth rates have spiked during the pandemic as millions have worked remotely.

Investors ranging from George Soros’ family office, which raised its investment in Amazon.com Inc by 102%, to Dan Sundheim’s D1 Capital Partners, which increased its stake in Microsoft Corp by 74%, bet on the powerhouse companies leading the transition to doing nearly everything from home.

Soros and Daniel Loeb’s Third Point established new positions in Chinese e-commerce company Alibaba Group Holdings Ltd , with Loeb telling clients that worries about China’s relationship with Hong Kong and the United States “created an air pocket in trading.”

Cinctive Capital Management, a hedge fund that employs teams of traders, put on a new position in Zoom Video Communications Inc which is now hosting milestone events like weddings in addition to the more mundane Monday morning office meetings. Its stock price has surged 263% this year.

Online payments giant PayPal Holdings Inc n, whose stock has gained 79% since January as consumers performed an increasing number of cashless transactions, attracted Senator Investment Group and Carlson Capital among its new investors. Cinctive raised its stake by 26% and Adage Capital Management increased its stake by 17% to 1.5 million shares.

Scott Ferguson’s Sachem Head Capital Management established a new position in Nuance Communications Inc , maker of Dragon speech recognition products. Viking Global Investors raised its position in the company.

Regulatory fillings known as 13Fs show what fund managers owned at the end of the second quarter. While they are backward looking, they offer one of the few public disclosures of what prominent funds own at any given time.

Along with the bets on technology, some funds took positions in consumer companies that suffered steep declines in the first quarter.

Viking established new positions in Hilton Worldwide and discount retailer TJX Companies Inc . Moore Capital boosted its position in TJX by 528%. Brahman Capital, meanwhile, established a new position in motorcycle manufacturer Harley-Davidson Inc . Shares of the company are up 42% over the last three months.

While several prominent funds appeared to be betting on a consumer rebound, some added protection against inflation by moving into gold. Mason Capital Partners, Sandell Asset Management and Caxton Associates all initiated new positions on the SPDR Gold Trust , which is up nearly 28% for the year to date.

(Reporting by Svea Herbst-Bayliss and David Randall with additional reporting by Tim McLaughlin; Editing by Ira Iosebashvili and David Gregorio)