January 27, 2020 Real Estate Publication

The best-performing hedge funds are piling into these financial shares

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE).

Drew Angerer | Getty Images

Bank stocks may seem far from hedge-fund darlings, but some of the best and under-the-radar managers in the industry are doubling down on them.

Every quarter, investors get a glimpse into an otherwise opaque arena as hedge funds file their long positions with the Securities and Exchange Commission, and the information is disclosed 45 days after each quarter ends. CNBC used Symmetric.io, a hedge-fund tracking firm, to find the top-performing hedge funds and see where the smart money placed their wagers in the third quarter.

In fact, the best-performing hedge funds with a track record of beating the market are not managed by big names such as David Einhorn and Bill Ackman. The top 10 funds from Symmetric are mostly run by lesser-known managers.The data reflect third-quarter holdings that hedge funds disclosed last week in required quarterly filings.

Symmetric.io grades the stock-picking ability of nearly 1,000 hedge funds in its database with a proprietary indicator of performance called StockAlpha. It is derived by comparing the performance of equities in the fund with that of a sector exchange-traded fund.

A big chunk of of the best funds piled into financial stocks by the end of third quarter. Carlson Capital built a $69 million investment in Morgan Stanley shares and a $53 million stake in Bank of New York Mellon. Zions Bancorp, Noah Holdings, StoneCo and HarborOne Bankcorp were also loved by the best-performing hedge funds.

The bets on bank stocks have lifted the funds’ performance as the financials sector has been the biggest winner among the 11 S&P 500 groupings for the past three months, rallying more than 11% during the period. The group’s strength also led the broad market to record highs in recent weeks.

Morgan Stanley has climbed more than 22% in the past three months, while Bank of New York Mellon has returned 14%. A rebound in yields in recent months coincided with the rally in bank stocks.

Besides financials, the funds’ top new positions also include certain companies in real estate and consumer discretionary. Long Pond Capital added $77 million worth of Las Vegas Sands and REITs such as Kilroy Realty and VEREIT. Soroban Capital Partners built new stakes in Linde and Domino’s Pizza.

Related Posts

The Kindest Cut: Why the 2020 Bitcoin Halvening Is the Most Important Yet

January 16, 2020

January 16, 2020

In May of 2020, bitcoin will see its next halving: the reduction of the reward for successfully mining a block....

Wall Street analysts say invest in these top stocks in 2020 including McDonald’s & Facebook

January 11, 2020

January 11, 2020

McDonalds Big Mac Getty Images Wall Street analysts say there’s no shortage of high quality stocks with upside for investors...

Stocks have less upside this year, according to the analysts who know them best

January 11, 2020

January 11, 2020

Traders work on the floor at the New York Stock Exchange. Brendan McDermid | Reuters Company analysts see only modest...

Why 2020 could be a big year for international stocks over US equities

January 11, 2020

January 11, 2020

A pedestrian looks at an electric quotation board displaying the numbers on the Nikkei 225 Index on the Tokyo Stock...

Gene Munster puts together a new case for why Apple stock should be trading 50% higher

January 10, 2020

January 10, 2020

Gene Munster, a former top Wall Street tech analyst turned venture capitalist, says Apple‘s stock has reason to trade 50% higher...

Cramer: I feel like a ‘clown’ for defending Boeing in the early days of 737 Max scandal

January 10, 2020

January 10, 2020

CNBC’s Jim Cramer said Friday that he feels like a “clown” for defending Boeing in the early days of the...

Things are so bad for Six Flags it got downgraded twice by the same analyst in less than 12 hours

January 10, 2020

January 10, 2020

A ride at Six Flags amusement park in Upper Marlboro, MD. Jonathan Newton | The Washington Post | Getty Images...

Ex-Goldman tech chief Marty Chavez joins start-up seeking to disrupt cancer

January 10, 2020

January 10, 2020

Martin Chavez, Goldman Sachs  Amanda Gordon | Bloomberg | Getty Images Marty Chavez’s next act is beginning. The former Goldman...

Ex-Goldman tech chief Marty Chavez joins start-up seeking to disrupt cancer diagnosis

January 10, 2020

January 10, 2020

Martin Chavez, Goldman Sachs  Amanda Gordon | Bloomberg | Getty Images Marty Chavez’s next act is beginning. The former Goldman...

Stock prices keep going up, but earnings are failing to keep pace

January 10, 2020

January 10, 2020

The good news is that stocks are continuing to rally because the market is assuming the magic combination of continuing...

CEO confidence in the economy has cratered, while consumers believe things are OK

January 9, 2020

January 9, 2020

Consumers and corporate chieftains are heading in the opposite direction, with one group still brimming with good thoughts about the...

Cramer says Wall Street analysts playing catch-up to market rally: ‘Just a very bullish moment’

January 9, 2020

January 9, 2020

CNBC’s Jim Cramer said Thursday that research houses on Wall Street underestimated the staying power of the stock market’s 2019...

Nearly all corporate CFOs say the economy is going to slow and the stock market is overvalued

January 9, 2020

January 9, 2020

Chief financial officers at big U.S. companies enter 2020 on a cautious note, with almost all anticipating an economic slowdown...

Wall Street usually shakes off volatility from US-Iran conflicts, history shows

January 8, 2020

January 8, 2020

Members of the Hashed al-Shaabi paramilitary force walk above a portrait of US President Donald Trump as they hold a...

Stocks climb in the ‘first five days’ indicator, sending bullish signal for 2020

January 8, 2020

January 8, 2020

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 27, 2018. Eduardo...