Goldman Sachs shared-favorites stock basket outperforms as financials gain weight

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Goldman Sachs shared-favorites outperform

Highlights

Goldman Sachs reports Boeing, Capital One Financial, Mastercard, SpaceX, Thermo Fisher Scientific, and Visa as new second-quarter shared favorites among hedge and mutual funds.
The shared-favorites basket has returned 29% year-to-date, with the financial sector's weight at a post-crisis high as both fund groups overweight financials for only the third time historically.
Since 2013, the basket delivers a 17% annualized return with 22% standard deviation, median P/E at 25x versus 19x for S&P 500, based on $10 trillion in disclosed positions.

Quarterly basket changes and filing data

As reported by CNBC, citing Goldman Sachs, six stocks emerge as shared favorites in second-quarter 13F filings from hedge funds and mutual funds: Boeing, Capital One Financial, Mastercard, SpaceX, Thermo Fisher Scientific, and Visa.

Capital One, SpaceX, and Thermo Fisher Scientific are new additions this quarter. Goldman defines the group as stocks that appear in both its proprietary Hedge Fund VIP basket and its Mutual Fund Overweight basket, based on filings submitted to the Securities and Exchange Commission at the start of the third quarter.

Ben Snider, Goldman’s chief U.S. equity strategist, says the shared-favorites portfolio has returned 29% year-to-date. He says the basket has historically outperformed, although with higher volatility.

Financial sector tilt drives new additions

The addition of Capital One alongside Visa and Mastercard reflects a broader increase in exposure to financial stocks by both hedge funds and mutual funds. Goldman says both fund groups are now overweight financials for only the third time in its historical data.

Snider writes that hedge funds increase their net tilt toward financials by more than three percentage points in the second quarter, reaching the sector’s largest position since before the Global Financial Crisis. Mutual funds also raise their financials exposure and now hold their biggest overweight since at least 2012.

Since 2013, the shared-favorites group delivers an annualized return of 17% with a standard deviation of 22%, according to Goldman. The bank says the median stock in the basket trades at 25 times earnings, compared with 19 times for the median S&P 500 stock, and its latest report covers about $10 trillion in equity positions across 991 hedge funds and 504 large-cap actively managed mutual funds.

Our earlier coverage of Wall Street firms’ expansion in Dallas described how banks, exchanges, and fintech companies are deepening their Texas footprint as the state grows into a major U.S. finance hub. It outlined large-scale investment plans by firms such as Morgan Stanley and Goldman Sachs, alongside the build-out of new exchange infrastructure, and explained the cost and regulatory factors driving the broader geographic shift.

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