- Major funds Fidelity, Janus Henderson, JPMorgan, Tiger Global Management and Coatue, placed bets on Apple before October’s 15% decline.
- Burned by “Red October” market bloodbath, hedge funds have had their worst month since May 2010.
- Tech specifically saw a massive sell off in October. A survey found funds are least bullish on tech stocks since the financial crisis.
Hedge fund Goliaths made some major wrong-way bullish bets on Apple, just before the stock crashed.
The so called “Red October” markets bloodbath made it an already brutal month for investors of all stripes. But slowing iPhone sales and supplier warnings piled on Apple specifically, turning those funds’ bets into losers. Apple fell more than 15% last month and is down about 20% from its all-time high.
Mutual fund Fidelity added 7 million shares during the quarter ended in September, Reuters reported, bringing its total holdings to about 111 million shares. Philippe Laffont’s Coatue Management raised its Apple exposure by a massive 938% to 884,321 shares, according to Symmetric.io data published in Reuters.
Janus Henderson added 3.3 million shares for a total of about 21 million shares. The fund has also had a rocky quarter: The Financial Times reported earlier this month that investors redeemed a net $US4.3 billion in the latest three-month period, after $US2.7 billion of negative investor flows in the quarter ended June.
Then there’s JPMorgan, which added 1.3 million shares during the quarter, taking its holding to about 43 million shares, Reuters said. Meanwhile, Chase Coleman’s Tiger Global Management added to its holding, it now owns just over 1 million shares.
A broad hedge fund universe tracked by Hedge Fund Research lost 3% in October, their worst month since May 2010, when the eurozone debt crisis was the major issue facing markets.
And a Bank of America survey this week found that fund managers are now the least optimistic on tech since the financial crisis.