Billionaire George Soros apparently has placed big bets against the stock market, according to recent SEC filings.
“The position was most likely a costly one, as the S&P 500 has rallied 8 percent since Oct. 1. More specifically, the index is up 9.4 percent since the November election of President Donald Trump, whom Soros strongly opposed,” CNBC reported.
Soros' bets against stocks came in the form of puts, or options to sell, on two exchange-traded funds that track broad market indexes, CNBC reported.
He took out a put position of 2.5 million shares on the iShares Russell 2000, a fund that tracks the small-cap index, according to an S&P Global Market Intelligence analysis of Soros filings with the Securities and Exchange Commission. That ETF is up 21 percent since bottoming just before the election, and 12 percent from Oct. 1, CNBC reported.
That position had a notional value — if the puts were exercised — of $330.6 million, representing a 59 percent increase from the $208.4 million value in the third quarter.
He also held 493,000 shares of puts on the SPDR S&P 500 ETF, which tracks the large-cap index. The notional value of those puts was $110.2 million, a 27 percent decline from the previous quarter, according to S&P.
Soros also had a short position on industrial stocks, with $77.8 million worth of puts on the SPDR Industrial Select Sector fund. That ETF has gained 12.3 percent since the beginning of the fourth quarter.
However, Soros countered his short exposure with bets on banks. He held $72.7 million worth of calls, or options to buy, on the SPDR Financial Select Sector ETF, which holds large-cap banks as well as other financial giants including B-class shares of Berkshire Hathaway. The fund is up nearly 27 percent since the start of the fourth quarter.
The New York-based firm disclosed a $14.9 million position in Goldman Sachs and made a new bet on Bank of America worth $3.9 million. One of its biggest buys during the last three months of 2016 was a call option on the S&P Select Sector SPDR Fund - Financial Sector worth $72.6 million.
A number of asset managers bought into financial stocks during the final months of 2016 after Trump's surprise victory suggested that tax cuts and a reduction of regulatory burdens plus higher interest rates could benefit the financial sector.
Soros recently hired UBS executive Dawn Fitzpatrick to be the firm's chief investment officer, putting a woman in charge of his portfolio for the first time.
To be sure, many of Soros' investment moves have been recently scrutinized in the press.
Late last month, some of Soros’ short positions dating back to 2012 were published on the Dutch financial market regulator’s website due to “human error,” according to the Dutch Authority for Financial Markets (AFM).
The short positions, bets on a stock declining, were “between 0.2 percent and 0.5 percent,” of shares outstanding in the companies shorted AFM spokesman Ward Snijders told Bloomberg.
The Financial Times earlier reported that some of the positions, including bets against Dutch banks, appeared briefly on the website on Tuesday evening. One Dutch bank in which short positions were revealed Tuesday was ING Groep NV, according to the Financial Times. ING declined to comment on Thursday.
The Dutch market authority apologized after admitting it had accidentally published details of short positions in stocks on its website beyond what it normally discloses.
(Newsmax wire services contributed to this report).
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