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Hedge funds took profits in large cap consumer discretionary stocks in the fourth quarter of 2011 and put more money to work in the tech sector, which has been the top performer so far this year.
A new report from Credit Suisseanalysts shows that the top 50 hedge funds raised their portfolio exposure to the S&P 500 technology stocks to 27 percent in the fourth quarter from 24 percent a quarter before.
At the same time, the hedge funds significantly decreased their exposure to consumer discretionary stocks, which had the largest weight in the first three quarters of 2011.
“They probably see tech stocks as more attractive, whereas macro factors and concerns about consumer spending are not in favor of consumer discretionary stocks,” says Credit Suisse’s Pankaj Patel, who led the study.
Hedge fund exposure to the S&P 500 consumer discretionary stocks fell to 16.8 percent from 20.8 percent over the same time period.
Meanwhile, allocations to energy grew, although big hedge funds still remain underweight the sector.
Industrials and consumer staples were tied for the largest underweight.
The top three S&P 500 stock holdings of big hedge funds are: El Paso , Motorola Solutions and Apple .
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