Ken Griffin ranks tenth in our list of most successful investors in the world, based on their net worth. He founded Citadel Investment Group in 1990. The fund posted double-digit returns over the last year when most of the other funds did not do well. We picked the top five large-cap stock positions from Citadel’s 13F portfolio and compared their performances with the S&P 500 for a period between 1999 to 2012. Ken Griffin’s equity portfolio was up 0.58% on average each month, versus a 0.32% return registered by the S&P 500. Citadel Investment Group thus out-performed the index by 42 basis points per month, or 5.04% per year. Let us analyze some of the large cap stock picks of Ken Griffin’s Citadel Investment Group to help recreate the same alpha.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
Alphabet Inc (NASDAQ:GOOGL) represented the largest stock holding in Citadel Investment Group’s equity portfolio at the end of September. The fund initiated a new position, which contained 635,345 class A shares worth $510 million at the end of September. Other funds with substantial stakes in Alphabet Inc (NASDAQ:GOOGL) included Andreas Halvorsen’s Viking Global and Ken Fisher’s Fisher Asset Management. The stock is up by 4.8% year to date and is trading close to its 52-week high of $839. For its last quarter, the company posted earnings of $9.06 per share, on revenue of $22.45 billion, versus consensus estimates of EPS of $8.63 on revenue of $22.05 billion. A total of 137 funds held $14.78 billion worth of Alphabet Inc (NASDAQ:GOOGL)’s shares at the end of September, compared to 135 funds owning $11.55 billion worth of stock a quarter earlier.