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Soros Sticks With Gold but Slashes Exposure to US Equities, Brazil

Thursday, 19 Aug 2010 07:51 AM

Hedge fund legend George Soros has stuck with his big bet on gold but slashed his holdings in dozens of major U.S. companies, from Verizon Communications to Pfizer, and investments in Brazil.

In a recent quarterly securities filing, Soros Fund Management reported owning substantially fewer U.S. listed stocks than three months earlier. The fund listed $5.1 billion of equities as of June 30, down 42 percent from $8.8 billion at the end of March, Reuters reported.

After a terrible quarter for the stock market that saw the Standard & Poor's 500 Index plunge 12 percent, Soros may have been anticipating further turbulence ahead.

Top holdings from the first quarter including energy producers Hess Corp. and Suncor Energy and telecommunications giant Verizon were slashed. At the end of the second quarter, he had $1.5 million worth of Hess, down from $302.5 million, $13.6 million of Suncor, down from $285.3 million and $395,000 worth of Verizon, down from $175.1 million.

The firm also cut back on drugmaker Pfizer, with holdings worth $4.7 million down from $91.4 million, banking company JPMorgan Chase was cut to $3.9 million from $114.9 million, and Wal-Mart Stores was down to $673,000 from $72.9 million.

The billionaire investor’s fund also reportedly sold its American Depositary Receipts, or ADRs, of Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, amid uncertainties about the company's capitalization plans, according to a recent regulatory filing.

The fund didn’t unveil the reason for the sale or the amount raised from the Petrobras stake sale, The Wall Street Journal reported.

Petrobras plans to complete a massive share offering in September to finance its medium and long-term investments plans, the Journal reported.

Uncertainties about the plan have caused Petrobras's shares to sink about 21% so far in 2010, costing the company 75 billion Brazilian reals ($43 billion) in market value, the Journal reported.

Soros Fund Management LLC sold all of its Petrobras's ADR's, worth $638 million at the end of the first quarter. The fund had a total of 5.88 million nonvoting shares and 9.1 million common shares at the end of the first quarter, according to a filling posted on the SEC website.

The Soros fund also sold its shares of Brazil's private bank Bradesco SA, worth $240 million at the end of the first quarter, and its shares in Brazilian brewer Companhia de Bebidas das Americas, or AmBev, worth $321 million.

The fund firm said it owned 5.24 million shares of the SPDR Gold Trust, worth $638 million as of June 30. Though down slightly from the fund's 5.59 million shares owned at the end of the first quarter, that was the fund's biggest holding by dollar value.

With the sale of so many other holdings, the Gold ETF constituted almost 13 percent of the firm's total equities, up from 7 percent at the end of the first quarter.

Soros does not typically explain his quarter-to-quarter moves. A spokesman for the firm declined to comment.

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Hedge fund legend George Soros has stuck with his big bet on gold but slashed his holdings in dozens of major U.S. companies, from Verizon Communications to Pfizer, and investments in Brazil. In a recent quarterly securities filing, Soros Fund Management reported owning...
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2010-51-19
Thursday, 19 Aug 2010 07:51 AM
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