5 Most Successful Quant Hedge Funds And Their Top Picks

Renaissance Technologies

– Top Pick (as of June 30): Novo Nordisk A/S (ADR) (NYSE:NVO)

– Shares Owned (as of June 30): 12.95 Million

– Value of the Holding (as of June 30): $696.44 Million

Probably the best performing quant fund on Street since inception, Jim Simons‘ Renaissance Technologies is known for shuffling its portfolio at breakneck speed, which leads to immense trading fees, which is why the fund has charged uncommonly high fees to its investors. However, the fund has held a stake in Novo Nordisk A/S (ADR) (NYSE:NVO) since the third quarter of 2005 and the company has been among its top-five equity holdings for the past several quarters. Interestingly, Novo Nordisk A/S (ADR) (NYSE:NVO) is also the only stock covered in this article that is trading in the red for 2016, being down by 28.7%. A large part of that loss is a direct result of the company lowering its full-year sales and profit forecast during its second quarter earnings release in August, which was partially due to the loss of a key contract for its top-selling insulin drug NovoLog during that period. Following that debacle, the company quickly launched an executive management shakeup in early-September, leading to the announcement that its EVP and head of Corporate Development, Lars Fruergaard Jorgensen, will replace its President & CEO, Lars Rebien Sorensen, who will be retiring at the end of 2016. Sorenson was recently ranked by Harvard Business Review as the top performing CEO in the world, so it’s debatable whether his replacement will be able to fill those shoes. On September 23, analysts at Piper Jaffray initiated coverage on Novo Nordisk’s stock with a ‘Neutral’ rating.

Citadel Investment Group

– Top Pick (as of June 30): Facebook Inc (NASDAQ:FB)

– Shares Owned (as of June 30): 4.57 Million

– Value of the Holding (as of June 30): $522.78 Million

Among all of the quant hedge funds covered in this article, Ken Griffin’s Citadel Investment Group boasted the most valuable U.S. equity portfolio at the end of June. According to its latest 13F filing, that portfolio was worth around $90 billion at the end of the second quarter and consisted of stocks from almost all sectors. However, Facebook Inc (NASDAQ:FB), in which the fund upped its stake by 95% during the first quarter and by 2% during the second quarter, continued to remain its top pick at the end of June. Like Amazon, the multi-year rally in Facebook Inc (NASDAQ:FB)’s stock also doesn’t seem to be coming to an end anytime soon, as it is continues to make new highs every month. For its fiscal third quarter, analysts are expecting the company to report EPS of $0.96 on revenue of $6.9 billion, considerably higher than the EPS of $0.57 on revenue of $4.5 billion that it generated during the same quarter of last year.

Disclosure: None