Google, Microsoft Dominate Mutual Funds, Apple Still Most Popular In Hedge Funds: Citigroup

by: ValueWalk

Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) remained the most-owned stocks among the 50 largest mutual funds in the United States during the third quarter of 2014, while Apple (NASDAQ:AAPL) is now the most-widely held hedge fund holding south of the border.

Google and Microsoft were both a Top 10 holding in 19 mutual funds through the three-month period ended September 30, good enough for a tie in the top-stock standings for the second-straight quarter, according to Citigroup Global Markets.

Wells Fargo (NYSE:WFC) was a Top 10 holding in 16 mutual funds, and ranks third in the quarter, while Apple and Gilead Sciences (NASDAQ:GILD) both had 13 Top 10 positions.

In the hedge fund space, Apple was the most sought-after stock, with 12 funds placing them in the Top 10. Time Warner Cable (TWC) was next in line, with 10 Top 10s, followed by Actavis Plc (NASDAQ:ACT) and Covidien Plc (COV), which made nine and eight Top 10 lists, respectively.

"Perhaps more impressive, Bank of America (NYSE:BAC) added the greatest number of holdings at mutual funds, while Covidien saw the greatest increase in holdings at hedge funds," said Tobias Levkovich, Citigroup's U.S. equity strategist.

"Of the stocks that made the Top 10 lists, Gilead was the best performer, surging nearly 30% in the third quarter, while Baker Hughes was the weakest, slipping more than 12%."

Mr. Levkovich said the updated Top 10 report also highlighted an increasing preference for consumer discretionary and energy equities at hedge funds, while healthcare and technology names both represented 27% of the top holding positions for mutual funds.

"Furthermore, ranking the data by concentration ratios revealed that Home Depot (NYSE:HD) was the most over-owned holding at mutual funds, followed by Gilead," the Citigroup strategist said.

"This compared with AbbVie (NYSE:ABBV) and Facebook (NASDAQ:FB), which had the highest concentration at hedge funds."

Editor's Note: Article originally appeared in the Financial Post, reproduced with permission by ValueWalk.