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Why George Soros Lost Money during Trump Rally

PART:
1 2 3
Part 2
Why George Soros Lost Money during Trump Rally PART 2 OF 3

Will George Soros’s Position in IWM Provide a Strong Return?

George Soros’s position in the iShares Russell 2000

According to its recent 13F filings, Soros Fund Management has increased its position in the iShares Russell 2000 ETF (IWM) by 36% in 1Q17 compared to the previous quarter. Currently, the firm holds 3.3 million shares of the iShares Russell 2000 puts.

Will George Soros’s Position in IWM Provide a Strong Return?

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IWM performance

On a year-to-date (or YTD) basis, the iShares Russell 2000 ETF (IWM) rose 2.0%. On a month-to-date (or MTD) basis, it fell 1.1% as of May 26, 2017. Since the US (QQQ) (VFINX) presidential election on November 8, 2016, IWM has risen 15.7% as of May 26.

Soros Fund Management’s short position in the S&P 500 resulted in a loss in the first quarter. Since the US election outcome, George Soros has become bearish on Donald Trump’s various agendas.

Comparison between the S&P 500 and the iShares Russell 2000

The iShares Russell 2000 (IWM) has outperformed the SPDR S&P 500 ETF (SPY) since the US presidential election on November 8, 2016. However, on a YTD and month-to-date basis, the SPDR S&P 500 ETF has outperformed the iShares Russell 2000 (IWM) ETF as of May 26, 2017.

There was a large surge in US small-cap stocks just after US presidential elections compared to large-cap stocks as the graph above shows. However, between January 2017 and March 2017, large-cap companies rose continuously. Better macroeconomic indicators and improving conditions for the US economy mainly contributed to the gain in US large-cap stocks over this time period.

In the next part of this series, we’ll analyze George Soros’s current investment in media stocks.

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