Goldman’s “Hedge Fund VIP Basket” is Basically QQQ, But Worse

Goldman’s “Hedge Fund VIP Basket” is Basically QQQ, But Worse

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Goldman hedge fund vip

A report from CNBC this morning titled “Goldman’s list of popular stocks among hedge funds is trouncing the market.” makes it seem as though Goldman’s “Hedge Fund VIP Basket” (the name of the list) is packed to the brim with stock market sleeper picks. 

The article opens with, “A group of hedge funds’ favorite stocks outperformed the broader market by a mile during this year’s elevated volatility.”

Our first thought:

What? 

Elevated volatility who? 

Source: MacroTrends VIX Historic Chart

With a VIX at 17.74, down 22% YTD, we aren’t sure what “elevated volatility” they’re referring to. But we digress — we have to find out more about this high-powered stock list that has apparently outperformed the stock market “by a mile.”

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The article goes on to identify that Goldman’s Hedge Fund VIP list analyzes the holdings of 740 hedge funds, and a total of $2.2T worth of equity positions as of 2023 in order to determine the top 10 holdings of each fund, forming a mega list of 50 “Hedge Fund VIPs” — the type of stocks you have to pay a fund manager to scout out. We’re going to reveal that now:

Goldman Sachs Hedge Fund VIP Basket, Top 10 Stocks

  1. Microsoft
  2. Amazon
  3. Meta
  4. Alphabet
  5. Uber
  6. Apple
  7. Nvidia
  8. Visa
  9. Salesforce
  10. Netflix

Hold on. This list looks familiar.

Invesco QQQ Nasdaq ETF, Top 10 Stocks

  1. Microsoft
  2. Apple
  3. Amazon
  4. Nvidia
  5. Alphabet
  6. Meta
  7. Tesla
  8. Broadcom
  9. Pepsi
  10. Costco

Okay, so mostly the same, with a few extras like Uber and Salesforce (Netflix is also a member of QQQ, albeit a bit lower in allocation). Those extras must be part of the reason why Goldman’s Hedge Fund VIP Basket has “outperformed the market by a mile.” Right?

“This basket has returned 14% year to date, beating the S&P 500 by 10 percentage points, Goldman said. These popular long positions also outperformed concentrated short bets in nearly every sector, the firm said.”

… 14% YTD? Hold on.

So all this bragging about beating the S&P by a mile and trouncing the market

…all the money that clients pay hedge funds…

 …Not to mention the fact that 90% of hedge funds underperform the S&P 500 even without the expensive fees…

And this is what we get? A “VIP Basket” that is still performing at about half the capacity of the QQQ ETF? 

Color us unimpressed. This is why we’re all about learning to do it yourself. Even if you can learn enough to open a brokerage and put your money in a well-known ETF like SPY, you’ll have a 90% chance of outperforming the world’s top fund managers. 

And if you’re bold enough to become an options trader? Well…

Source: Market Rebellion’s Unusual Options Activity — UPST call options alerted on May 9th with UPST trading at $13.39. The stock has more than doubled since then, and these options have more than 17X’d in size.

You get the idea.

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