Hedge Funds Are Piling Into These Five ETFs

#2. SPDR Gold Trust (ETF) (NYSEARCA:GLD)

– Investors with long positions as of March 31: 63

– Aggregate value of investors’ holdings as of March 31: $6.74 billion

SPDR Gold Trust (ETF)(NYSEARCA:GLD) was another beneficiary of the gold rush during the first quarter. Its ownership among hedge funds covered by us and the aggregate value of their holdings in it saw a massive increase of 80% and 42% during that period, respectively. SPDR Gold Trust (ETF) (NYSEARCA:GLD) is currently the largest physically backed gold exchange traded fund in the world. Since it tracks the price of gold rather than the stocks of gold mining companies like the Market Vectors Gold Miners ETF, shares of GLD have seen relatively less upside (15%) this year than shares of the latter. However, the returns of GLD look much better when compared over the last five years because while the Market Vectors Gold Miners ETF has lost nearly 60% of its value during that time, GLD is down only 21%. Hedge funds that reduced their stake in GLD during the first quarter included billionaire John Paulson‘s Paulson & Co, which reduced its holding by 18% to 4.77 million shares.

#1. SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

– Investors with long positions as of March 31: 99

– Aggregate value of investors’ holdings as of March 31: $15.44 billion

The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has always been the most popular ETF among hedge funds as it provides them with the easiest way to hedge their portfolios (by shorting it or buying ‘Put’ options). While the number of hedge funds covered by us that held long positions in this ETF increased by five during the first quarter, the aggregate value of their holdings in it came down by $10.78 billion – a drop of over 40% – during the same period. When this large drop in the aggregate value of hedge funds’ holdings in the ETF is compared with the marginally positive returns generated by the S&P 500  during the first quarter, it points towards the conclusion that several large funds were not much bullish on US equities heading into the second quarter. The world’s largest hedge fund, Ray Dalio‘s Bridgewater Associates, trimmed its stake in SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 2% to 10.32 million shares during the first quarter.

Disclosure: None