Interesting blog post by Bespoke Investment Group
Bespoke Investment complied a list from endowments to hedge funds to mutual funds, highlighting the sector weights based on the 13F statements.
According to their previous posting on April 2009, (link)
the sectors that were most underweight in the list were:
- Financials
- Industrials
- Telecommunications
- Materials
- Consumer Discretionary
In their August 2009 post, you can see that the investment management community had moved their weighting of financials, technology, healthcare as their top three sectors, making up of over 47% of their holdings. (link)
Commentary:
When there are big shifts in sector holdings, one can generally assume that these sectors will be lifted as a rising tide lifts all boats. There is definitely value in tracking 13F statements to see where the institutional money flows from sector to sector overtime.
As you can recall, there was a time in 2008-2009 where holding financials was the “dumb” play, anyone who bought and held financials must have been dumb because of all the chaos going on with Lehman Brothers, Bear Stearns, Washington Mutual going under. Because of the uncertainty nobody wanted to touch any of these companies with a 10 ft pole, however due to the uncertainty, one can argue that securities were very mispriced.
With the market recovered close to October 2008 highs, its much more uncertain from here on out where the market will go. One must remember the markets are forward looking and manic depressive. Sometimes it pays to act as a contrarian and buy quality companies in a depressed sector.
