In this article, we will take a detailed look at Arrowstreet Capital Stock Portfolio: Top 10 Stocks to Buy.
Arrowstreet Capital is a Boston-based independent investment management firm known for its quantitative investment strategies and discreet market presence despite overseeing substantial assets. Founded in 1999 by Bruce Clarke, former CEO of PanAgora Asset Management, along with John Y. Campbell and Peter Rathjens, the firm was created to manage institutional investments, focusing on international and emerging market equities. Its client base includes major institutions such as the Oregon Public Employees Retirement System, CalPERS, and Macquarie Group.
In terms of investment philosophy, Arrowstreet Capital operates as a unified team to manage client portfolios through a global, quantitative approach, leveraging data-driven insights to identify market inefficiencies and generate sustainable, risk-adjusted returns. Its strategy is based on research and technology, using quantitative models to uncover investment opportunities that may not be immediately apparent to the broader market. With a focus on global equities across both developed and emerging markets, the fund constructs diversified portfolios aimed at delivering long-term value.
Moreover, Arrowstreet Capital prioritizes continuous improvement in response to shifting market conditions, integrating new data sources and employing advanced data science tools to refine its investment insights and enhance portfolio performance. While Arrowstreet does not assume that ESG-focused stocks will consistently outperform, it acknowledges the impact of environmental, social, and corporate governance factors on profitability and risk, incorporating them into its models. The firm’s collaborative team structure ensures active portfolio management, with a strong emphasis on long-term investment strategies and talent development.
Peter Rathjens is the Chief Investment Officer at Arrowstreet Capital in Boston, Massachusetts. He holds a BA from Oberlin College and an MA from Princeton University. Bruce Clarke, Co-Founder and Chairman of Arrowstreet Capital, leads an institutional asset management firm overseeing a portfolio exceeding $140 billion. Previously, he served as CEO of PanAgora Asset Management and gained international experience working in Canada, the UK, Italy, and the US. Clarke earned an MBA from London Business School and a Bachelor’s degree from the University of British Columbia. John Young Campbell, a Partner and Co-Head of Research at Arrowstreet, has an extensive background in finance, having served as President of the American Finance Association, Director of Research at PanAgora Asset Management, a professor at Princeton University, and President of the International Atlantic Economic Society. He holds a doctorate from Yale University and an undergraduate degree from the University of Oxford.
Arrowstreet Capital’s latest 13F filing for Q4 2024 reported $124.94 billion in managed 13F securities, with a top 10 holdings concentration of 28.9%. This reflects the firm’s strategic focus on high-value investments while maintaining a diversified portfolio.
Peter Rathjens of Arrowstreet Capital
Our Methodology
The stocks discussed below were picked from Arrowstreet Capital’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Arrowstreet Capital Stock Portfolio: Top 10 Stocks to Buy
10. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders as of Q4: 47
Arrowstreet Capital’s Equity Stake: $1.16 Billion
One of the world’s largest producers of tobacco, Altria Group, Inc. (NYSE:MO) released its financial results for the fourth quarter and full year of 2024, along with its earnings guidance for 2025, on January 30, 2025. CEO Billy Gifford highlighted the company’s progress, emphasizing strong financial performance, strategic investments, and substantial cash returns to shareholders. The company projects its 2025 full-year adjusted diluted earnings per share (EPS) to range between $5.22 and $5.37, reflecting a 2% to 5% increase from the 2024 base of $5.12.
Altria’s core tobacco business delivered solid income growth and improved profit margins, supported by its strong brands and dedicated workforce. The company achieved $5.11 billion in net revenue after excise taxes for Q4 2024, reflecting a nearly 1.6% increase from the previous year. Earnings per share also saw a rise, reaching $1.29, which was 9% up from fourth quarter 2023, and slightly surpassed analyst estimates of $1.28. Altria Group, Inc. (NYSE:MO) announced that its Board of Directors has declared a regular quarterly dividend of $1.02 per share. The dividend will be payable on April 30, 2025, to shareholders who are recorded as of March 25, 2025. The ex-dividend date for this distribution is also set for March 25, 2025.
Altria’s 2025 earnings guidance takes into account several factors, including the impact of one fewer shipping day in the first quarter, potential effects of enforcement efforts on the illicit e-vapor market, and cost savings reinvestment from its previously announced Optimize & Accelerate initiative. The projection also factors in lower expected net periodic benefit income. While the company remains confident in its growth outlook, it acknowledges the evolving external landscape, including economic conditions, consumer purchasing trends, regulatory developments, and illicit product enforcement. Additionally, Altria Group, Inc. (NYSE:MO) plans to invest in initiatives supporting its long-term vision, such as market activities for smoke-free products and continued research and regulatory efforts.
Ashva Capital stated the following regarding Altria Group, Inc. (NYSE:MO) in its Q3 2024 investor letter:
“At Ashva Capital, our focus on intrinsic value–rather than market sentiment or temporary price metrics– sets our portfolio apart from peers. For example, we hold Altria Group, Inc. (NYSE:MO), which has demonstrated resilience and strong performance within our portfolio, particularly following a robust Q3 earnings report. Altria’s results highlighted increased demand for smokeless products, underscoring both the adaptability of its business model and its long-term growth potential—a key factor in our investment decision.
This approach to intrinsic value echoes insights from renowned value investor Bill Miller, whose strategy emphasized fundamental value over market-driven factors. Key principles from Miller’s approach that inform our strategy include:..” (Click here to read the full text)
9. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders as of Q4: 108
Arrowstreet Capital’s Equity Stake: $1.21 Billion
The Walt Disney Company (NYSE:DIS) surpassed market expectations in its fiscal Q1 2025 earnings report released on February 5, 2025. The company reported earnings per share of $1.76, outperforming analysts’ projections of $1.43. Additionally, revenue exceeded forecasts, reaching $24.69 billion compared to the expected $24.55 billion. A standout achievement was the continued success of its entertainment streaming division, which includes Disney+ and Hulu, as it recorded its second consecutive quarter of profitability. This segment generated $293 million in operating income on $6.07 billion in revenue, reflecting a 9% year-over-year increase. Although Disney+ experienced a global net loss of 700,000 subscribers, Hulu outperformed expectations by gaining 1.6 million new subscribers, largely attributed to price increases implemented in October.
The Walt Disney Company (NYSE:DIS)’s stock has declined 13.5% in the two weeks of March 2025, dropping from $113.80 to $98.44, marking its steepest drop since November 2021. Economist Alice Kassens attributed this decline to weakening consumer confidence, as concerns over rising prices are reducing consumer sentiment and spending. Since discretionary expenses like vacations and travel are often the first to be cut, industries such as airlines, hospitality, and entertainment—including Disney—are feeling the impact. Despite these challenges, analysts cited the stock’s strong long-term growth potential for its theme parks, resorts, and cruise lines. On its latest earnings call, The Walt Disney Company (NYSE:DIS) reported a 5% decline in U.S. theme park income, largely due to hurricanes Milton and Helene, which disrupted operations in the southeastern U.S. last summer.
As of Q4 2024, Arrowstreet Capital significantly increased its holdings in The Walt Disney Company (NYSE:DIS) to approximately 10.9 million shares, marking a 76% rise from 6.2 million shares in Q3. The fund’s stake in the company is now valued at over $1.2 billion. Insider Monkey’s database indicated that 108 hedge funds held stakes in the company at the end of Q4 2024, with a value of nearly $6.61 billion, as opposed to 76 funds in Q3.