What are Top Investment Managers Holding in Their Portfolios?

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Analyzing the Funds of Five “Super Investors”

With the market usually taking a breather during the summer, it’s a great opportunity to analyze how top funds positioned their portfolios at the end of Q1 2023.

We selected five funds of various sizes, each one with a renowned investor at its helm that often has a unique outlook on the market and strategy towards building out their portfolio.

The differences in portfolio compositions underline the variety of investment strategies, showing how some of the top investors approach portfolio construction.

Berkshire Hathaway has one of the world’s best known and most successful portfolios, which has significantly outperformed the S&P 500 over the long term.

While the S&P 500 has returned 195% since 2013, Warren Buffett and Charlie Munger’s fund grew by 260% over the same time period.

Although Buffett is known for preaching diversification, almost half of Berkshire’s portfolio is all in the market’s most valuable company, Apple. The rest of the portfolio is fairly diversified with a mix of bank stocks, consumer staples like Coca-Cola and Kraft, along with oil and gas companies.

Jim Simons’ hedge fund, Renaissance Technologies, is best known for its groundbreaking use of complex mathematical models and algorithms which pioneered the practice of quantitative investing.

As a result, the hedge fund’s portfolio holdings showcase astounding diversification, with the fund’s largest holding being a 2% allocation to pharmaceutical giant Novo Nordisk.

The portfolio is split across more than 3,900 different positions, showcasing the fund’s strategy of squeezing out returns from a diverse collection of investments through its algorithm-driven, statistical arbitrage approach.

Ray Dalio’s Bridgewater Associates was one of the few hedge funds to predict and successfully navigate the 2008 financial crisis, largely thanks to its “all weather” strategy which looks to perform well in all economic environments through diversification and a risk-parity approach to asset allocation.

As a result, you see many parallels and “counterweights” in the fund’s holdings. Its largest holding of MSCI’s Emerging Markets ETF is balanced out by the Core S&P 500 ETF.

Bridgewater is also one of the few funds which holds shares in a gold ETF. While other funds we’ve looked at have investments in gold royalty companies or miners, which likely have strong balance sheets and businesses to support the investment, Dalio’s fund has preferred to invest directly in the precious metal.

Stanley Druckenmiller is best known as having been a key strategist for George Soros’s Quantum Fund, along with his own consistent record of returns with Duquesne which average 30% annually.

Known for his macroeconomic approach to investing, Druckenmiller isn’t afraid to make unique and concentrated bets when he has high conviction.

Currently his highest conviction bet and largest holding in his portfolio is Coupang Inc., which is South Korea’s largest online marketplace. Along with Coupang, Druckenmiller positioned his fund to take advantage of this year’s AI boom, with significant holdings in companies like NVIDIA, Microsoft, and Alphabet.

The smallest of all five funds we looked at, Michael Burry’s Scion Asset Management might be one of the best known for its role in predicting the 2008 financial crisis early on.

The protagonist of the film, The Big Short, Michael Burry is best known for his aggressive short bets and overall value investing approach especially in distressed assets.

Scion Asset Management’s portfolio reflects this as a good portion of its holdings at the end of Q1 this year were in various bank stocks which had declined significantly throughout the month of March.

Burry’s biggest bets however are in Chinese ecommerce companies JD.com and Alibaba, indicating Burry’s belief in a consumer driven economic reopening for China this year.

Markets This Month by VC+ We hope you enjoyed this excerpt by Niccolo Conte from Markets This Month, which hits VC+ subscribers’ inboxes every month. Get 25% off an annual subscription to VC+ by clicking here.