Hedge funds were severely impacted by US stock market performance in Q1, according to the latest S&P Global Market Intelligence Hedge Fund Tracker, an aggregate analysis of hedge fund equity ownership.  

In total, the top funds managed approximately USD141 billion in equity holdings in Q1, down over USD18 billion from Q4 2015. The funds also decreased the total number of stock positions held from 427 to 408, the fewest stock positions held since S&P Global Market Intelligence began tracking this data in 2014.  Consumer discretionary and information technology stocks led the sell-off, with Apple ranking as the most sold-off individual stocks of the quarter.  The highest volume of buying occurred in in Facebook stock, with a total of USD2.3 billion in buys among top funds in the first quarter.

"Many of the trends unfolding in the broad economy are magnified when viewed through the lens of the hedge fund microcosm," says Pavle Sabic (pictured), Head of Market Development, S&P Global Market Intelligence. "Research has shown that buying and selling patterns among hedge funds are closely correlated to subsequent stock market performance, making this quarterly snapshot of hedge fund activity an incredibly useful benchmark for further investment analysis."

Based on these trends among hedge fund managers, S&P Global Market Intelligence also produced a Trends & Ideas research note, which names specific ETFs that are weighted toward the stocks named in the 2016 Q1 Hedge Fund Tracker. 

"While some investors may want to use this analysis to spot securities that are in and out favour by hedge fund managers, others may want the diversification benefits and liquidity that ETFs provide," says Todd Rosenbluth, S&P Global Market Intelligence Director of ETF Research.  "There are a number of ETFs that emulate a hedge fund strategy."