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George Soros is among the most renowned and controversial hedge fund managers on the planet. Well known for his political affiliations, which are now opposite to a number of politically-charged CEOs such as Elon Musk, Soros has become an interesting name to follow not only due to his outspoken political views and his philanthropic efforts, but his investing success over many decades.
Through his Quantum Fund, Soros has provided impressive returns to investors over very long periods of time. This man has employed a number of unique trading strategies over the years, often pursuing major bets on currencies and other trades other hedge fund managers wouldn't employ. These sorts of outlandish bets led some investors to call Soros "the world's greatest money manager," at least according to Institutional Investor in 1981. With various global macro strategies under his belt, investors often paid attention to where Soros was placing his capital in terms of the stock market.
Here are three of the largest bets currently in place in Soros' portfolio I think investors may want to consider.
Key Points About This Article:
- George Soros is one of the greatest investors of all time, having made some rather remarkable and large bets on macro trends throughout his career.
- Accordingly, plenty of investor interest is placed on his current holdings - here are three of his top picks in his portfolio worth watching closely.
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SPDR S&P 500 ETF (SPY)
Passive investing can be a great way to build one's wealth. Indeed, trying to beat the market can be a fool's errand, and some of the best investors of all time know this is true. However, it's rare to see a billionaire investor like George Soros almost implicitly admit the market is smarter than he is, but perhaps that's part of his genius with holding the SPDR S&P 500 ETF ( NYSEARCA:SPY ) as his top portfolio holding.
Consisting of the 500 largest U.S. companies, the S&P 500 is the premier benchmark most investors gauge their performance against. As the saying goes, if you can't beat 'em, join 'em. In this case, having a significant portfolio weighting toward the overall index can ensure the Soros Fund remains at least competitive with the benchmark, while other positions can potentially amplify upside or reduce downside in upside down markets.
There are other passive index funds out there for investors to choose from, but the SPDR S&P 500 ETF is largely considered to be among the most liquid and widely-traded. For those looking to hedge positions via options, this ETF also has a very liquid options chain, which can come in handy. And that's a tool I'm sure Soros uses from time to time.
Over the long-term, SPY remains a top option for long-term investors (be they passive or active) to manage risk and garner returns that are at least close to the benchmark over time.
AstraZeneca (AZN)
AstraZeneca ( NASDAQ:AZN ) is Soros' second-largest holding, which should come as no surprise to many investors. The pharma giant is much less correlated to broader market moves, meaning this is a safe and rather defensive pick in this current environment. Soros and other institutional hedge fund managers appear to be taking a more defensive approach to portfolio construction, so I understand this pick.
But AstraZeneca is also a pharma company that's seen strong growth in recent years. The company is aiming to expand its current portfolio of 12 blockbuster drugs to 25 by 2030. Key drugs like Lynparza, Tagrisso, and Imfinzi have fueled significant revenue growth in the past, and AstraZeneca's global presence means this company has plenty to gain from a broadening out of demand globally for the indications these drugs are currently approved for.
As AstraZeneca looks for approvals on new indications, and is able to expand its portfolio of blockbuster drugs, expectations are high that growth can continue. Given the company's valuation multiple of 17-times earnings , investors don't have to pay much for this growth. Thus, this is a relative value pick I like on this basis as well.
If the company can continue to see revenue growth in the 15.5% range, as implied by analyst expectations, I think this stock could be poised for nice steady growth higher. That's what Soros appears to be betting on right now.
Westrock (WRK)
Westrock ( NYSE:WRK ) is an interesting pick as a top Soros holding, as this stock is one that doesn't get much coverage. The materials and packaging company is focused on providing a "range of substrates...paperboard, containerboard and kraft paper options in a variety of weights, coatings and appearances." Additionally, the company provides various packaging automation technology to clients looking to optimize their operations, and has increasingly focused on providing value-added products such as merchandising displays and custom products to its clientele via a team of "scientists, mechanical engineers, packaging designers, and digital technologists."
Basically, Westrock is in the rather unsexy business of producing boxes and other paper-related products. However, while this less-than-exciting business may not get retail investors super excited, a range of hedge fund managers seem to think this stock is the next best thing since sliced bread.
Some of that probably has to do with the company's fundamentals. This is a stock that's up more than 40% over the past year, raising its price-earnings multiple to more than 60-times. However, this is a stock that's provided relatively steady performance in the past, and is a bet on increased packaging needs due to longer-term trends behind the e-commerce revolution and global shifts toward increased packaging needs. With a 2.6% dividend yield and steady growth in recent years, this is a stock many investors like Soros continue to bank on as a defensive play. I'll have to do a deeper dive into this name moving forward, as there appear to be some intricacies worth diving into.
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