The quarterly hedge fund reporting bonanza known as 13F reporting day arrived (which discloses positions as of Dec 31, 2021), and as noted previously many of the most prominent investors got caught offside by the swoon in the market in the first month of 2022 after adding to some of the high-flying names which got trampled in the recent selloff, even as a handful skillfully timed their exit from the biggest decliners.
Some of the most notably rotations saw institutional investors increasing their exposure in tech stocks (just in time for the rout) while decreasing exposure to the communications sector during the fourth quarter. Both industry groups have been hurt by rising rates in 2022. According to Bloomberg, investors raised holdings in the technology sector by 0.8%, with Vmware, Clarivate and Nokia among biggest gains in aggregate positions (Vmware shares are up 6.6% year-to-date, but the other two are down sharply as worries over Fed monetary tightening has led to a general selloff in the tech space).
Investors funded their new purchases by selling holdings in communications stocks which dropped by 0.9%. Meta Platforms, Comcast and Charter saw some of the largest aggregate sales in the group. The moves by funds proved prescient as the stocks have dropped 35%, 5.8% and 6.8% so far in 2022, respectively.