A Trio of Hedge Fund Favorites


Marshall Hargrave Image Marshall Hargrave Contributing Editor, Wyatt Investment Research

It takes millions of dollars to even get a sit-down with a hedge fund. Still, there are ways to “invest like a hedge fund” without having millions of dollars, suggests Marshall Hargrave, editor of Wyatt Research's Daily Profit.

Every quarter, Goldman Sachs (GS) compiles a list of the stocks that hedge funds love the most; these are the stocks that appear most frequently among the top 10 holdings of hedge funds.

Goldman Sachs has even launched an ETF to track its VIP list. Since inception, the Goldman Sachs Hedge Industry VIP ETF (GVIP) has outperformed the S&P 500 by three percentage points.

I’ve done the leg work of digging through the list to find the best stocks to help investors follow the smart money. Here is my take on the three the most interesting opportunities among recent hedge fund favorites.

Bank of America (BAC)

Among the notable billionaire hedge fund managers adding Bank of America to their portfolios during the fourth quarter are Stephen Mandel’s Lone Pine Capital and Dan Loeb’s Third Point.

Why the sudden hedge fund interest? Bank of America could be a big winner from rising interest rates as higher interest rates mean Bank of America can make even more on its massive deposit base.

Bank of America has an impressive wealth management base thanks to its purchase of Merrill Lynch during the financial crisis.