George Soros Places His New Buy in Utilities: Will You?

Legendary investor George Soros has made some changes to his firm’s portfolio in the first quarter. Soros Fund Management LLC bought some new securities in the same quarter. The firm’s recent investment in the utility sector and fresh investment in some other securities is in the limelight.

Firm’s new buys in Q1

Among the firm’s top five buys, the Utilities Select Sector SPDR Fund (NYSEARCA:XLU) was the third-largest buy. Overall, XLU accounted for 2.24% of the hedge fund’s total portfolio of publicly traded securities in the first quarter of 2020. The utility sector plays as a defensive sector in the economy. When any turmoil rises in the economy, investors flock to utility stocks since they pay a regular dividend. XLU has returned -9.9% on a year-to-date basis. Meanwhile, the broader market S&P 500 Index (NYSEARCA:SPY) has returned -5% during the same period. XLU’s major holdings including NextEra Energy (NYSE:NEE), Dominion Energy (NYSE:D), and Duke Energy (NYSE:DUK) have returned 1.5%, -0.3%, and -9.1%, respectively.

In the first quarter, Peloton Interactive was Soros’ top buy. However, the firm already held the stock in the previous quarter. The fedge fund added more quantities in the first quarter. Before adding, Peloton represented 0.26% of the firm’s total portfolio of publicly traded securities. In the first quarter, Peloton accounted for 4.02% of the firm’s portfolio. Peloton Interactive is a consumer cyclical stock that produces fitness products in the US. Usually, consumer cyclical stocks perform well when there’s an upturn in economic activities. Soros’ strong investment in this stock signaled that he might expect a sharp improvement in the economic activity after the global pandemic. So far, the stock has returned 71% on a YTD (year-to-date) basis.

Soros’ largest holdings in Q1

Notably, the firm’s top five holdings in the first quarter were Liberty Broadband, VICI Properties, D.R. Horton, Peloton Interactive, and Activision Blizzard. These stocks represented 29.61%, 4.19%, 4.04%, 4.02%, and 3.31%, respectively, of the firm’s holdings. George Soros’ strong investment in Liberty Broadband signals that he’s very confident about its business model. The company provides various Internet services to businesses and residents in the US. Recently, the work-from-home concept due to the global pandemic will likely increase the demand for Liberty Broadband’s service. The stock has returned 3% on a YTD basis.

Read Buffett Should Have Bought Apple Stock Instead of an iPhone to learn more about his investment ideas.