Hedge Funds Aren’t Crazy About PowerShares QQQ Trust, Series 1 (ETF) (QQQ) Anymore

PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) was in 12 hedge funds’ portfolio at the end of the first quarter of 2013. QQQ has experienced a decrease in hedge fund interest in recent months. There were 19 hedge funds in our database with QQQ positions at the end of the previous quarter.

In today’s marketplace, there are tons of indicators shareholders can use to analyze publicly traded companies. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a healthy amount (see just how much).

Equally as important, bullish insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are lots of incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).

Keeping this in mind, let’s take a look at the key action regarding PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ).

Hedge fund activity in PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)

Heading into Q2, a total of 12 of the hedge funds we track were bullish in this stock, a change of -37% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.

PowerShares QQQ Trust, Series 1 (ETF) (QQQ)Of the funds we track, Dmitry Balyasny’s Balyasny Asset Management had the most valuable position in PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), worth close to $20.5 million, comprising 0.3% of its total 13F portfolio. On Balyasny Asset Management’s heels is PEAK6 Capital Management, managed by Matthew Hulsizer, which held a $17.2 million call position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ken Fisher’s Fisher Asset Management, and J Kevin Kenny Jr’s Emerging Sovereign Group.

Due to the fact that PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds that slashed their positions entirely heading into Q2. It’s worth mentioning that Louis Bacon’s Moore Global Investments said goodbye to the biggest investment of all the hedgies we watch, totaling about $495 million in call options, and J. Alan Reid, Jr. of Forward Management was right behind this move, as the fund dumped about $180.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 7 funds heading into Q2.

Click here to learn why you should track hedge funds