Much like Tiger Global’s top pick, Mastercard Inc (NYSE:MA) was also unable to beat the market, returning a mere 0.47% in the first quarter of 2015. Furthermore, the stock performed far worse than its industry peers, which registered an average return of 4.23% during this period. Nevertheless, Mr. Coleman’s firm was not alone in its bullish stance towards the company. Out of the 739 funds we track, 91 held long positions in Mastercard Inc (NYSE:MA) at the end of the last quarter, including Stephen Mandel’s Lone Pine Capital, with a stake of 20.30 million shares.
Alibaba Group Holding Ltd (NYSE:BABA) was one of Tiger Global’s biggest bets at the beginning of the year, with a position of 5.82 million shares, valued at around $604.48 million. Although the hedge fund was particularly bullish regarding the company, the stock dropped 19.92% last quarter, reducing Tiger Global’s overall returns significantly. Dan Loeb’s Third Point was also affected by the stock’s poor performance, as it held a stake of 10.0 million shares. In fact, Alibaba Group Holding Ltd (NYSE:BABA) was one of the biggest losers among large-cap stocks this quarter, along with Bank of America Corp (NYSE:BAC) and Intel Corporation (NASDAQ:INTC).
It should be clear why tracking the activity of hedge funds such as Tiger Global is important for small investors who are looking for new investment opportunities. However, it is worth mentioning that simply imitating the moves made by major hedge funds rarely guarantees great returns, since most of their top picks are in large-cap stocks. These equities usually don’t beat the market by a large margin, as they are usually more efficiently priced. Hence, we have concentrated our efforts on gathering and analyzing information regarding the top collective small-cap picks of more than 700 hedge funds, which resulted in a small-cap strategy that returned 132% over the past 2.5 years, and beat the S&P 500 ETF (SPY) by nearly 80 percentage points.