Firms in the US are pointing to economic turbulence in the face of the upcoming earnings season, potentially preparing investors for lower guidance. This makes the markets more treacherous within the tech sector, with the Nasdaq 100 total returns slumping for the first time in 13 years.
Such market conditions push investors to rotate out of stocks into either cash or haven-like assets, for example, gold.
Large hedge funds and banks are not immune to portfolio rotations, where the Swiss National Bank (SNB) has been the largest seller of FANG (an acronym that refers to the stocks of companies Meta, Amazon, Apple, Netflix, and Alphabet) stocks, according to Welt’s Holger Zscaepitz, who took to Twitter on October 11 to show SNB’s balance sheet changes as relating to FANG stocks.
Scanning SNB’s 13F holdings indicate that the bank was and still is a major shareholder in large US high-growth companies such as Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Tesla (NASDAQ: TSLA), Nvidia (NASDAQ: NVDA), Meta (NASDAQ: META), Netflix (NASDAQ: NFLX) and Alphabet Inc. (NASDAQ: GOOG).
Over the past quarter, the bank disposed of $4.2 million worth of AMZN shares, $1.6 million NVDA, $2.5 million TSLA, $9.6 million AAPL, $1.6 million META, $2.6 million GOOG, and $0.3 million NFLX.
In the past, the bank decided to invest 94% of its balance sheet outside of Switzerland in an attempt to devalue the Swiss franc back in 2015; however, its balance sheet looked like the one of a hedge fund and not a typical central bank.
Such investments have probably brought hefty returns to the bank as the Nasdaq index returned roughly 23% annually since 2010. Profit-taking in a tough environment could be prudent for institutional investors with large funds looking to make outsized returns for their investors.
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