Stocks most owned by the so-called smart money are handily beating the market this year, according to Goldman Sachs' latest "Hedge Fund Trend Monitor" report.
Four times a year, hedge funds file their long positions with the SEC, and the information is released to the public 45 days after each quarter ends. Goldman's current hedge fund VIP list consists of the 50 stocks that "appear most often among the top 10 holdings of fundamentally-driven hedge fund portfolios" for the March quarter. The bank analyzed the positions of 821 hedge funds with total long and short stock holdings of $1.9 trillion.
"Our Hedge Fund VIP list of the most popular long positions has outperformed the S&P 500," strategist Ben Snider wrote in a note to clients Friday. "From an implementation standpoint, the hedge fund VIP list represents a tool for investors seeking to 'follow the smart money' based on 13-F filings."
The firm's basket of the top holdings of hedge funds is up 10 percent this year through May 18 versus the S&P 500's 7 percent return.
Snider cited how the list beat the market's performance in 66 percent of quarters and by 60 basis points on average per quarter since 2001. Turnover for the VIP list was slightly below normal with 13 new names in the March quarter compared with the historical average of 16 stocks.
Here are the 13 new stocks entering the Goldman hedge fund VIP list.