We recently compiled a list of the 12 Best Low Risk High Growth Stocks to Invest In. In this article, we are going to take a look at where Interactive Brokers Group, Inc. (NASDAQ:IBKR) stands against the other low risk high growth stocks.
In the past few days, the reintroduction of tariffs by the US government has been a significant factor influencing market dynamics. A 25% tariff on goods from Canada and Mexico, along with a 10% levy on Chinese imports, has heightened concerns about potential trade wars. These measures have led to increased market volatility, as investors assess the implications for global supply chains and corporate earnings. According to a report by news agency Reuters, based on data gathered by investment bank Goldman Sachs, hedge funds have been reducing their exposure to US equities, marking the fifth consecutive week of net selling. This trend indicates a defensive posture, with funds anticipating potential economic slowdowns resulting from the new tariffs. Conversely, retail investors have shown resilience, injecting significant capital into the market, possibly betting on a resolution to trade tensions.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Meanwhile, another report by Reuters, based on a survey carried out by investment bank Barclays, reveals that investors are shifting away from traditional hedge fund strategies that rely on broad market movements due to concerns over market volatility in 2025. The Barclays survey of 325 hedge fund investors managing nearly $9 trillion found they want hedge funds to reduce beta exposure to as low as 5% or even zero. The report highlights that traditional hedge fund approaches like long/short stock picking, credit, and activism are losing favor. Instead, investors prefer funds using algorithmic trading and merger-arbitrage strategies. Multi-manager hedge funds, which operate multiple trading strategies under one firm, are now in high demand, returning 56% of investment share in 2024.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
To compile our list of the best low risk, high growth stocks, we made a list of firms with a beta of less than 1 and positive earnings per share growth over the past five years. The companies with the highest number of hedge fund investors during Q3 2024 were picked as the best low risk, high growth stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A skilled senior trader executing an order in a fast paced trading environment.
Interactive Brokers Group, Inc. (NASDAQ:IBKR)
Number of Hedge Fund Holders: 52
Interactive Brokers Group, Inc. (NASDAQ:IBKR) is an automated electronic broker. The firm’s fourth-quarter earnings reported a 37% increase in commission revenue to $477 million, driven by higher customer trading volumes, reflecting the company’s expansion in product offerings. The company also reported an 11% increase in net interest income to $807 million, resulting from higher average customer margin loans and credit balances. In December last year, the firm introduced significant enhancements to its web-based Advisor Portal, bringing advanced trading and portfolio management tools to financial advisors worldwide. These updates streamline client account management and trading by integrating powerful features from the company’s flagship desktop platform into its web-based offering.
Overall IBKR ranks 6th on our list of the best low risk high growth stocks to invest in. While we acknowledge the potential of IBKR as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than IBKR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.