What Fund Managers Are Buying and Selling

It's the thing every investor wants to know: which stocks are fund managers buying and selling? We shine a spotlight on the details

Annalisa Esposito 23/12/2020 14:28:00

Spotlight

2020 has been an incredible year for brave investors who have made the right calls. Those who topped up holdings or bought new ones in March and April, enjoyed cheaper valuations after the sharp stockmarket sell-off sparked by the Coronavirus pandemic.

But picking and selling stock is not an easy task. We have looked at what 79 UK-domiciled funds and investment trusts which are rated by Morningstar analysts to see what they were buying and selling in the third quarter of the year:

What Have Fund Managers Been Buying? 

The most popular company among our cohort of rated funds is Hangzhou Tigermed Consulting (300347), which has been a new addition to some 12 fund portfolios, among them, the Silver-Rated Dimensional Emerging Markets Core Equity fund, which is up 8.7% year to date.

Hangzhou Tigermed, a pharma research group, was founded by Oxford-educated billionaire Ye Xiaoping and has soared this year as it was approved by Chinese authorities for a clinical trial of Remdesivir, a novel anti-viral drug.

The second most-bought stock among our group of funds is leading platform for housing transactions and services in China, KE Holdings (KE8A), which was bought by eight funds including Bronze-rated Fidelity Asia fund and Silver-Rated JPMorgan China Growth & Income trust (JCGI).

The firm floated on the stock market in August and saw its share price rocket by 87% in a blockbuster public debut that raised more than $2 billion. The company is a combination of two distinct businesses: an 18 year old household name off-line brokage business called Lianjia and online platform Beike Zhaofang, which was started just two years ago. 

Stock

New Positions

Hangzhou Tigermed

12

KE Holdings

8

Snowflake

4

Taiwan Semiconductor

4

Sands China

4

Match Group

4

Samsung BioLogics

4

Alibaba

4

THG Holdings

3

Intesa Sanpaolo

3

In third position is Snowflake (SNOW), a software company which sells cloud-computing technology for storing and analysing data. It went public on September, raising $3.4 billion and setting a record as the largest US software IPO ever.

Elsewhere, three other Chinese companies also make it to the list: three-star rated semiconductor manufacturer Taiwan Semiconductor (2300), four-star rated casinos and resorts operator Sands China (01928) and three-star rated behemoth e-commerce Alibaba (BABA). Its perhaps unsurprising the country has proved a ripe hunting ground for investors, having seen a sharp sell-off as it became the first nation to enter a lockdown before enjoying a strong recovery in the subsequent months. 

Meanwhile, one-star rated Match.group (MTCH) is another popular stock among our medalist funds, as one example of a business which has enjoyed a surge in user numbers as people have been confined to their homes. Indeed, online dating is just one trend that the coronavirus has magnified this year.

What Have Fund Managers Been Selling? 

China might be a particularly popular region for the new buys, but it also features heavily in our list of most sold stocks this year. Four Chinese stocks make the list including 58.com (WUBA), three-star rated Yum China (YUMC), Huazhu Group (HTHT), and JD.com. 

Stock

Closed Positions

58.com

8

JD.com

5

Wolters Kluwer

4

Yum China

4

Seagen

4

Visa

4

Volkswagen

4

Standard Life Aberdeen

4

Huazhu Group

4

Adidas

4

58.com’s business model consists of transferring products and services between purchasers and sellers in a range of industries including housing rental, recruitment, second-hand product, travel, catering and entertainment. Meanwhile Yum China owns several fast-food chains such as KFC and Pizza Hut, and Huazhu Group is a hotel group, a sector which has been hit hard by worldwide travel restrictions and a plunge in global tourism. 

Some eight funds closed their position in 58.com, including ASI Asia Pacific Equity and Asia Dragon Trust (DGN), both Bronze-Rated by Morningstar analysts.

JD.com may be a surprise to see on the list of sold stocks as a Chinese e-commerce firm, it has been well-placed to enjoy the benefits that the likes of Alibaba and Amazon have this year as a growing army of people have turned to online shopping. Indeed, the firm's share price is up around 35% year to date and the medical arm of the business, JD Health, enjoyed a successful stock market debut earlier this month. 

Outside of China, payments giant Visa (VISA) is another unexpected name on the list, while five-star stock Volkswagen (VOW3) has found itself out of favour with some of our fund managers, perhaps as concerns linger about car industry sales in a pandemic year. But could some of our most sold stocks simply be a sign that investors are taking profits? Adidas has enjoyed the athleisure boom of recent years, which has only been accelerated by this year's shift to homeworking and it's share have climbed almost 75% since the worst of the March sell-off. 

About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk

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