31 Most Popular Stocks Among Hedge Funds: 2024 Q1

What is the optimal strategy for investing in the stock market? Data from the Investment Company Institute reveals that by the end of 2021, passive funds constituted 16% of the stock market, while active funds comprised 14%. The remaining market share is held by individuals, pension funds, life insurance companies, and other entities. A decade ago, passive funds held approximately 8% of the market, whereas active funds held 20%. This trend suggests a growing perception among investors that beating the market is increasingly challenging, leading many to believe that index funds offer the most effective approach to stock market investing.

I hold a PhD in financial economics. I recognize that the intricacies of investing can be daunting for most individuals, and accessing market-moving information is often limited. Consequently, many gravitate towards index funds as a default investment option. However, I want to highlight that alternative strategies exist. By aligning with the consensus stock selections of hedge funds, you can potentially outperform the market with minimal time commitment—just a quarterly review suffices.

I know what you might be thinking. Hedge funds underperform the market on average, so, how can you actually beat the market by imitating them?

Typically, hedge funds lag behind the market during periods of market growth and surpass it during downturns. Many investors overlook the fact that hedge funds employ hedging strategies. In years like 2021, when the S&P 500 Index saw a substantial return of over 20%, it’s expected that hedge funds will underperform. Conversely, when the market experiences a decline, such as the 18.2% downturn witnessed in 2022, hedge funds tend to significantly outperform. According to HFR, hedge funds incurred a loss of 4.25% in 2022, resulting in an outperformance of 14 percentage points.

When the markets are up, the financial media complains that hedge funds underperform. When the markets are down, the financial media complains that hedge funds didn’t protect their investors from losses. We don’t pay attention to what an “average” hedge fund delivers because their returns are distorted for two reasons. First, they charge an arm and a leg for the stock picks that are publicly available with a 45-day delay. Second, they hedge but they don’t generate much alpha by hedging. Instead of tracking hedge fund returns, we track the returns of the most popular hedge fund stocks. Over long periods of time these stocks outperformed the market by a very large margin.

Insider Monkey has long been a believer of imitating the top stock picks of hedge funds, and this strategy has helped us beat the market over the last 10 years. For instance, between March 2017 and March 2024 our monthly newsletter’s stock picks returned 199%, vs. 145% for the SPY. Our stock picks outperformed the market by 54 percentage points. If you invested $100K into our strategy in March 2017, your portfolio would have grown to $299,000 instead of $245,000 for the same portfolio invested in index funds. You can download a sample issue of our monthly newsletter here.

We don’t share our monthly newsletter’s stock picks publicly, but we have been sharing the list of 30 most popular stocks among hedge funds here at Insider Monkey since the end of 2018. The majority of these stocks aren’t traditional value stocks. You can check out our previous article about the 30 most popular hedge fund stocks at the end of the third quarter and first quarter here. You can also check out the previous lists that are published in 2002Q4, 2022Q2, 2022 Q1, 2021 Q4, 2021 Q3 and 2021 Q2 here. In May 2021, we shared hedge funds’ top 30 stock picks for 2021 Q1. In February 2021, we also shared hedge funds’ top 30 stock picks. We also shared hedge funds’ top 30 stock picks at the end of November 2020. Three months before that we shared hedge funds’ top 30 stock picks for Q2’20. In fact, we have been sharing the list of hedge funds’ top 30 stocks since 2012 in our quarterly newsletter.

Last year’s top 30 stocks returned 53.2% and outperformed the S&P 500 Index ETF (SPY) by 27 percentage points, while the top 10 stocks returned 75.1%, versus a 26.2% gain for SPY during the same period. This year’s top 30 stocks returned 20.2% versus 11% gain for SPY through May 29th.

Overall, hedge funds’ top 10 stock picks returned 463.7% since 2014 (through May 29th) and beat the S&P 500 Index ETF (SPY) by 228.1 percentage points. We have been telling our readers and subscribers for years to imitate hedge funds’ top stock picks. Please keep in mind that more than half of investors invest their money in index funds. By investing in hedge funds’ top 10 stock picks, index fund investors could have generated an extra 228 percentage points in returns.

More than half of all investors invest in dumb index funds because they were made to believe that they can’t outperform the market by stock selection (or they are forced to invest in index funds in their companies’ retirement accounts). Hedge funds’ top 10 stock picks beat the S&P 500 index funds by 228 percentage points over a 10-year period.

Every quarter we process more than 900 hedge funds’ 13F filings and identify the top stocks among ALL 900+ hedge funds. The list of top 10 hedge fund stocks hasn’t changed much since the third quarter of 2018. You can invest in this low turnover simple strategy by subscribing to our quarterly newsletter or simply reading my articles.

If you subscribe to our free e-newsletter below, you can get a daily free email alert whenever we publish something important.

Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. We launched our monthly newsletter’s activist strategy more than 7 years ago and this strategy’s picks returned 199% since then and beat the SPY by 54 percentage points. Our subscription prices start at $99 per year and come with a 30-day full refund guarantee. Wait, if you use the discount code PR24D you can subscribe to our Premium Readership Newsletter for only $29 for the first year (a discount of 70%).

Most investors believe that hedge funds lost their “magic touch” a long time ago and can’t beat the market. Don’t trust the returns reported by hedge fund indices. They misrepresent hedge funds’ stock picking skills. Hedge fund indices underperform the market because hedge funds hedge and they charge an arm and a leg for their services. If you want to compare apples to apples, you need to take a look at the performance of the most popular hedge fund stocks vs. the returns of the S&P 500 Index. For the past decade, since the inception of our quarterly newsletter, technology giants like Apple, Google, Microsoft, Facebook, and Amazon have remained steadfast fixtures among the top 10 picks of hedge funds. You don’t need to be a mathematical genius to compute the staggering returns generated by these tech stocks, many of which now boast valuations exceeding $1 trillion.

The best thing about following hedge funds’ top picks on our website is that you don’t need to pay hedge funds an annual 2% fee and 20% of your profits to beat the market. We do that here free of charge using the holdings data from the legally required SEC portfolio disclosures. Our approach is also superior to investing directly into hedge funds because we don’t like to invest in a hedge funds’ 35th best idea when we can invest in only the best stock picks of the best hedge funds.

Below we listed the 30 most popular stocks among hedge funds at the end of March 2024. If you are only interested in a more concentrated portfolio, check out the top 10 stocks in this list below:

31.  The Walt Disney Company (NYSE: DIS)

Number of Hedge Funds: 92 (2024Q1)
Number of Hedge Funds: 89 (2023Q4)
Number of Hedge Funds: 89 (2023Q3)
Number of Hedge Funds: 92 (2023Q2)
Number of Hedge Funds: 95 (2023Q1)
Number of Hedge Funds: 99 (2022Q4)
Number of Hedge Funds: 112 (2022Q3)
Number of Hedge Funds: 109 (2022Q2)
Number of Hedge Funds: 113 (2022Q1)
Number of Hedge Funds: 111 (2021Q4)
Number of Hedge Funds: 101 (2021Q3)
Number of Hedge Funds: 112 (2021Q2)
Total Dollar Amount of Long Hedge Fund Positions: $8.5 billion
Percent of Hedge Funds with Long Positions: 10.0%
2024 Return: 13.8%
Popularity Ranking (2023Q4): 31
Popularity Ranking (2023Q3): 27
Popularity Ranking (2023Q2): 23
Popularity Ranking (2023Q1): 23
Popularity Ranking (2022Q4): 21
Popularity Ranking (2022Q3): 13
Popularity Ranking (2022Q2): 12
Popularity Ranking (2022Q1): 11
Popularity Ranking (2021Q4): 11
Popularity Ranking (2021Q3): 16
Popularity Ranking (2021Q2): 14
Noteworthy Hedge Fund Shareholders: Trian Partners, Tom Gayner