10 Largest Hedge Funds in The World And Their Favorite Stock Picks

1. AQR Capital Management (AUM: $172 billion) is the world’s largest hedge fund and one of the most successful quant hedge funds today with an AUM of $172 billion. The fund recently announced its plan to expand its headquarters in Connecticut and create  600 new jobs. Applied Quantitative Research or AQR Capital Management employs different investment strategies including convertible arbitrage and event-driven strategies. AQR’s long/short equity fund returned 15.45% annually since its inception in July 2013. Its equity market neutral fund returned 13% annually since its inception two years ago. How was it able to generate these decent recents? Well, let’s take a look at its top 3 positions which are also among the consensus picks of other big hedge funds.

Microsoft Corporation (NASDAQ:MSFT) is the largest holding of the planet’s biggest fund with a total value of $812 million. The bullish view of the fund is due to the Microsoft Corporation’s (NASDAQ:MSFT) globally recognised strong brand, massive competitive advantages and growth potential from fast growing new areas such as Big Data. Apple Inc.(NASDAQ:AAPL) is the second largest position in AQR’s portfolio with a total value of $728 million. Finally the third largest bet in Cliff Asness’ long book is Procter & Gamble with a total investment of $675 million, up 24% during the third quarter.

It is a good practice to follow the stock picks of the biggest hedge funds, but these aren’t the best hedge fund managers. The top mid-cap stock picks of the best performing hedge funds actually outperformed the S&P 500 Index by double digits in the last 12 months. Some of these best performing funds will join the ranks of the largest hedge funds in the world and start directing their attention to more liquid but less promising large cap stocks.