- Hedge funds have taken the biggest stock-market positions in the tech and consumer discretionary sectors, according to Bank of America Merrill Lynch.
- The bank published a list of stocks with the most relative weight among hedge funds.
After the tech sector, hedge funds are most aggressively positioned in consumer discretionary stocks, according to exchange-reported data from Bank of America Merrill Lynch.
Understanding what these big-money investors are doing is important because the most popular stocks have recently helped investors beat their benchmarks.
"Over the last several years, buying the most underweight stocks by large-cap active funds and selling the most overweight stocks by large-cap active funds has consistently generated alpha, although performance since 2017 has bucked the trend," Savita Subramanian, the head of US equity and quant strategy, said in a recent note.
The list below shows the stocks with the most relative weight among hedge funds, which Bank of America calculated as each stock's weight of net exposure divided by its S&P 500 weight.
Rockwell Collins
Ticker: COL
Sector: Industrials
Relative weight: 6.7
Source: BAML
EQT Corporation
Ticker: EQT
Sector: Energy
Relative weight: 6.8
Source: BAML
Aetna
Ticker: AET
Sector: Healthcare
Relative weight: 7
Source: BAML
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