Many funds from our database also prefer to have some exposure to the small-cap space and the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) saw a jump in popularity during the fourth quarter, with the number of funds long IWM having grown to 43 from 32. Consequently, the aggregate value of their positions surged to $1.59 billion from $960.96 million, amid a 4% growth registered by the ETF. Nevertheless, over the last 52 weeks, IWM took a hit and is down by more than 10%. Generally, small-cap stocks are considered a benchmark for the US economy and analysts expect iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) to underperform SPY at least until more certainty regarding the state of the economy. Meanwhile, among the investors that own shares of IWM is Michael Novogratz’s Fortress Investment Group, which owns 4.0 million shares. In addition, Jeff Smith’s Starboard Value owns ‘Put’ options underlying 9.70 million shares of iShares Russell 2000 Index (ETF) (NYSEARCA:IWM).
Finally, Similar to the past several quarters, the most popular ETF at the end of December was SPDR S&P 500 ETF Trust (NYSEARCA:SPY). The number of funds long the ETF that tracks the S&P 500 Index remained unchanged at 94 during the last quarter, while the aggregate value of investors’ holdings surged to $26.23 billion from $16.70 billion a quarter earlier. The growth in the aggregate value comes amid a 7% growth registered by the ETF during the fourth quarter of 2015. Among the funds long SPDR S&P 500 ETF Trust (NYSEARCA:SPY) are Ray Dalio‘s Bridgewater Associates and Eric Sprott’s Sprott Asset Management, which hold 10.51 million shares and 8.74 million shares as of the end of 2015, respectively. In addition, it’s important to mention that many investors own ‘Call’ and ‘Put’ options underlying shares of SPY, probably for hedging. For example, billionaire Ken Griffin’s Citadel Advisors owns ‘Put’ options underlying 23.37 million SPY shares and ‘Call’ options underlying 14.59 million shares. Lately, the performance of the S&P 500 and, consequently SPDR S&P 500 ETF Trust (NYSEARCA:SPY), were tied to oil prices, even though the correlation has been weakening. Nevertheless, crude prices seem to be stabilizing and earlier this week the ECB announced more stimulus in the euro zone, which involves expanding the QE program and cutting the interest rate to 0 from 0.05, although it also suggested that it won’t undertake any further reductions in the interest rates. This suggests that the seven-year bull run touched by the S&P 500 a couple of days ago is likely to continue. Now the eyes will be on the Fed and its decision regarding the key interest rate.
Disclosure: none
