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Morningstar: Top US Fund Managers Are Dumping These 10 Stocks

Morningstar: Top US Fund Managers Are Dumping These 10 Stocks
(Dollar Photo Club)

By    |   Wednesday, 02 December 2015 05:45 AM

Top U.S. fund managers sold overvalued stocks, underweight energy, utilities, communication services, healthcare and real estate shares at the height of the recent market plunge, Morningstar reported.

Morningstar’s Ultimate Stock-Pickers, “in most cases, were not only selling off shares of stocks trading close to or in excess of their estimates of fair value and ploughing the proceeds into existing positions, but were actually taking a stab at handful of new names with wide and narrow economic moats,” Greggory Warren, CFA, writes for Morningstar.

The 10 stocks being sold with the numbers of funds in parentheses after stock ticker symbol:
  • American International Group (AIG) (3)
  • Bank of America (BAC) (2)
  • Medtronic PLC (MDT) (6)
  • PepsiCo (PEP) (4)
  • Chubb (CB) (3)
  • CVS Health (CVS) (4)
  • Qualcomm (QCOM) (3)
  • UnitedHealth Group Inc. (UNH) (4)
  • Comcast (CMCSA) (6)
  • Thermo Fischer Scientific (TMO) (3)

“Our primary goal with the Ultimate Stock-Pickers concept is to uncover investment ideas that not only reflect the most recent transactions of some of the top investment managers in the business but are timely enough for investors to get some value from them,” Warren explained.

“Our top managers were underweight in Energy, Utilities, Communication Services, Healthcare and Real Estate relative to the weightings of those sectors in the S&P 500 at the end of September,” Warren said.

“They also held overweight positions in the Financial Services, Consumer Defensive, Technology and Basic Materials sectors, with their exposure to Consumer Cyclicals and Industrials being more or less in line with the benchmark index.”

So if you know the stocks that are being sold, what should you be buying?

Brad Neuman, investment analyst at Alger Funds, told The Street.com that in his opinion, hedged equity, growth stocks and active management are the keys to investing success next year.

He predicts growth stocks continuing to provide sold returns. As an example, The Street cited iShares S&P 500 Growth ETF (IVW), which it said is up 6% year to date in 2015 compared to a 3% drop in the iShares S&P 500 Value ETF (IVE).

“There's a premium put on growth in the mature phase of a cycle and investors are really looking for companies that can generate their own growth through market share gains within the economy rather than simply being dependent on the economy," Neuman told The Street.com.

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Top U.S. fund managers sold overvalued stocks, underweight energy, utilities, communication services, healthcare and real estate shares at the height of the recent market plunge, Morningstar reported.
stocks, shares, fund managers, sell
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2015-45-02
Wednesday, 02 December 2015 05:45 AM
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