20 Largest Hedge Hedge Funds in the World and Their Top Stock Picks

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In this article, we reviewed the hedge fund industry and why it is set to grow at a healthy pace. We also examined the 20 largest hedge funds in the world and their top stock picks. You can skip our detailed discussion and jump directly to the 5 Largest Hedge Funds in the World and Their Top Stock Picks.

The hedge fund industry has expanded rapidly over the last three years due to market volatility. In 2023, the industry is expected to reach a record $5 trillion in assets under management. The strong capital inflows suggest that investors view hedge funds as an appealing alternative investment option in volatile markets. According to Goldman Sachs, hedge funds will outperform 60/40 portfolios in 2023 after returning 11.8% in 2020, 13% in 2021, and significantly outperforming 60/40 portfolios in 2022. Data from the past also suggests that hedge funds perform well in volatile markets and high-interest-rate environments. Long-short equity strategies have generated an 8% return year to date, while multi, relative value, and credit strategies have also performed well so far in 2023. According to PivotalPath data, every hedge fund strategy it monitors has been profitable so far this year, and 75% of the funds it tracks remain profitable, with an average return of 9.1%.

“Total equity positions and total equity assets under management have increased in the third quarter at a pace we haven’t seen since 2015, suggesting a healthy appetite for stocks in the financials, energy, and healthcare sectors,” said Pavle Sabic, Head of Market Development, S&P Global Market Intelligence.

Lower volatility in the last decade has reduced trading opportunities for hedge funds. However, market fundamentals have shifted dramatically in the last three years, with uncertainty and volatility at one of the highest levels due to a variety of factors, including tail event risks. Currently, investors are unsure whether the global economy is entering a recession, whether there is a risk of financial contagion, how geopolitical instability will affect businesses, and how long the Fed will continue to tighten policies.

Higher volatility and uncertainty are likely to drive investors to alternative strategies such as hedge funds. Hedge funds are investment partnerships in which capital is pooled to invest in multiple assets to maximize returns and minimize risk. Hedge funds have a long history, dating back to 1949 when the first hedge fund was launched by A.W. Jones & Company.

Currently, there are thousands of hedge funds operating across the world. Some of the largest hedge funds in the world include AQR Capital Management, Renaissance Technologies, Man Group plc, Bridgewater Associates, and Berkshire Hathaway. The top stocks in hedge fund portfolios, according to data tracked by Insider Monkey, include Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and NVIDIA Corporation (NASDAQ:NVDA).