Simon Sadler‘s Segantii Capital Management Ltd. was established in 2007 and is based out of Hong Kong. The fund, which mainly invests in Asia-Pacific equities, uses a multi-strategy investment approach to pinpoint high-potential stocks. A former trader at both Dresdner Kleinwort Benson and Deutsche Bank, Sadler’s own firm has been highly successful since inception, returning 17% annually through March 2016.
As the fund’s assets have swollen thanks to its success, it made a strong push into the U.S market in the third quarter, with the value of its 13F portfolio more than quadrupling during the quarter to $367.81 million. The fund added 60 positions to its 13F portfolio during the quarter, while only unloading 11 holdings. In this article, we’ll take a look at some of the stocks and ETFs that the successful fund was buying in Q3, which included Yahoo Inc. (NASDAQ:YHOO), the Financial Select Sector SPDR Fund (NYSEARCA:XLF), Ryanair Holdings Plc (NASDAQ:RYAAY), Mobil’nye Telesistemy PAO (ADR) (NYSE:MBT), and the SPDR S&P 500 EFT Trust (NYSEARCA:SPY).
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.
Let’s start with Yahoo Inc. (NASDAQ:YHOO), which Segantii initiated a position in during the third quarter, adding 406,752 shares of the company to its portfolio, valued at $17.31 million on September 30. Verizon appears intent on completing its purchase of Yahoo despite the latter’s disclosure of a massive data breach after the fact. AOL CEO Tim Armstrong recently stated that the deal is more likely to happen than not. Of the hedge funds in our database, 90 funds held $8.27 billion worth of Yahoo shares in their portfolios at the end of the September quarter, equaling 19% of the stock’s float.
Segantii Capital Management also initiated a position in the Financial Select Sector SPDR Fund (NYSEARCA:XLF) during the third quarter. The fund held 530,000 of the ETF’s shares at the end of the quarter, worth $10.09 million, with the position accounting for 2.74% of its 13F portfolio’s value. The ETF invests in financial sector stocks, as its name implies, and Sadler and his team are likely bullish on it at the prospect of it performing better in the future as interest rates rise. Berkshire Hathaway and JP Morgan each account for more than 10% of the ETF’s weighting as of December 6. Among the funds we track, 26 funds held $582.96 million worth of the ETF’s stock in aggregate at the end of September, up from a mere $205.96 million in holdings on June 30.
We’ll check out three more of the fund’s bullish Q3 moves on the next page.