Mutual funds and hedge funds are finding rare common ground in a small cluster of stocks that have become consensus favorites across the industry, according to Goldman Sachs. The Wall Street firm analyzed $8 trillion in equity positions at the start of the fourth quarter based on regulatory filings. Goldman identified six names that rank as top holdings for both groups this quarter: CRH , Mastercard , Spotify , Talen , Visa and Vertiv . These “shared favorites” are constituents of both Goldman’s “Hedge Fund VIP” list and its “Mutual Fund Overweight basket.” They appear prominently across long-only and hedge fund portfolios despite the recent market volatility. Collectively, the group has outperformed the S & P 500 by 10 basis points year-to-date but the stocks lagged during the latest drawdown, Goldman said. The overlapping positions stand out because, sector-wise, the two investor types are not entirely aligned. Both mutual funds and hedge funds are overweight health care and industrials, but they diverge elsewhere. Mutual funds lean overweight financials while hedge funds are underweight, and hedge funds are overweight consumer discretionary as mutual funds pull back. Meanwhile, Goldman notes that the “Magnificent 7” stocks remain deeply embedded in hedge fund portfolios, with all seven part of the Hedge Fund VIP list, except Tesla. Yet the same stocks are all constituents of the Mutual Fund Underweight basket, underscoring long-only managers’ much cooler stance toward the megacap tech trade.
