But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Why hedge funds also bought housing and agriculture ETFs
Agriculture ETFs gained popularity in the first quarter and the beginning of the second quarter. Harsh weather conditions lifted prices for commodities.
DXJ tracks the performance of the WisdomTree Japan Hedged Equity Index. The Index and the fund are designed to provide exposure to equity securities in Japan.
GLD accounted for 2.87% of the hedge funds’ portfolio in 2Q14. GLD tracks gold bullion’s spot price. With an expense ratio of 0.40%, the fund has a five-year return of 14.05%.
EEM has exposure to large and mid-sized companies in EMs. It has easy access to 800+ EM stocks. The fund tracks the investment results of the MSCI Emerging Markets Index.
ETFs owned by hedge funds were valued at $36.9 billion at the start of 3Q14. This was an increase of 12.1% from $33.8 billion in the earlier quarter.
Third Point said it generated around a 20% return on its investment in Sony despite enduring profit warnings, falling sales at the consumer electronics business, and the sluggish pace of Japanese macroeconomic reforms.
Third Point noted in its letter that Alibaba can “generate long-term value in its core markets and compete in new ones, making it a compelling potential multi-year investment.”
Third Point added, “when we break down the applicability of Apple Pay to PayPal’s business mix, we find that Apply Pay will compete directly with only 1.5 to 2% of PayPal’s total payment volume (or TPV).”
Third Point said despite various challenges, eBay had “arrived at a critical inflection point and gained new focus.” It added that it has been “pleased” with eBay’s decision to split into two by spinning off its PayPal unit.
The analyst referred to data showing that since the start of 2012, Amgen’s shares rose 78%. In comparison, the NASDAQ Biotechnology Index rose 128%.
Faced with expiring patents and increasing competition for its blockbuster drugs, Amgen acquired Onyx to benefit from the latter’s innovative oncology portfolio and pipeline.
Third Point noted that Amgen needs to improve on its R&D evaluation process. The fund said the company has spent more on its late-stage pipeline assets than its biotech peers, but that the output has been “sparse” when compared to the investment.
The principal products represented 92% of Amgen’s worldwide product sales for the first half of 2014. Total product sales in 3Q14 rose 4% year-over-year, mainly driven by Kyprolis, Prolia, Neulasta, and Xgeva.
The fund noted in its letter that “Amgen has all the hallmarks of a hidden value situation, which is one of the fund’s favorite investment themes.”
In this series Activist investor Dan Loeb’s fund, Third Point Partners LP, disclosed some of the positions traded during 3Q14 in its 3Q investor letter. In this series, we’ll go…
Bridgewater Associates decreased its position in Cisco from 0.20% in the 1Q portfolio to 0.09% in the fund’s 2Q portfolio.
Bridgewater Associates decreased its position in Las Vegas Sands Corp. from 0.14% in the 1Q portfolio to 0.07% in the fund’s 2Q portfolio.
Bridgewater Associates decreased its position in Symantec Corp. from 0.21% in the 1Q portfolio to 0.04% in the fund’s 2Q portfolio.
Bridgewater Associates increased its position in Juniper Networks from 0.07% in the 1Q portfolio to 0.21% in the fund’s 2Q portfolio.
Bridgewater Associates exited its position in Monsanto Co. It accounted for 0.06% of the fund’s 1Q portfolio. Monsanto is the world’s largest seed company.