Hedge funds have been making some notable shifts in their portfolios following Donald Trump’s election win, according to Goldman Sachs strategists. The biggest theme? Deregulation exposure.
Ben Snider, senior strategist on Goldman’s U.S. portfolio strategy team, said hedge funds increased positions in stocks likely to benefit from deregulation, small business growth, and domestic sales in Q4 2024. Among the biggest gainers were Capital One Financial (NYSE:COF)which Snider called a new VIPalong with Stifel Financial (NYSE:SF), Tesla (NASDAQ:TSLA), and The Williams Companies (NYSE:WMB), which he labeled as rising stars.
Meanwhile, hedge funds cut back on stocks tied to China, particularly those exposed to supply chain risks, international sales, and tariffs. Stocks with China sales exposure dropped slightly (-1 basis point), but those tied to China supply chains and international sales saw a larger decline (-12 basis points). Stocks most vulnerable to tariffs took the biggest hit, dropping 20 basis points in hedge fund ownership.
Overall, hedge fund positioning shifted as follows:
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Deregulation plays increased by 25 basis points in ownership.
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Financial deregulation and small business exposure stocks rose by 15 basis points.
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Stocks focused on domestic sales climbed 8 basis points.
The data highlights how hedge funds are positioning themselves to capitalize on potential policy shifts under Trump’s presidency.
This article first appeared on GuruFocus.
