Seligman Tech Spectrum Master Fund turned sharply bullish at year-end. And it paid off in January.
The tech-driven hedge fund headed by Paul Wick posted a strong 6 percent gain last month, according to an email communication to investors seen by Institutional Investor. This was more than half its 11.45 percent increase for all of 2023.
Seligman declined to comment.
According to the firm’s December client report, dated January 22 and seen by II, the hedge fund cut its gross exposure from 144 to 120 percent by the end of November. The reduction was the result of slashing short exposure to 22 percent from 49 percent. Seligman entered 2024 75 percent net long, compared with 45 percent the previous month.
As of year-end, the portfolio’s largest gross industry exposures on the long side as a percentage of net assets were software, semiconductors, semiconductor equipment, interactive media and services, and hardware, per the report. On the short side, the largest gross industry exposures were semiconductors, biotechnology, specialty retail, pharmaceuticals, and health care providers and services. The largest net long industry exposure was to software (21 percent net long) and the largest net short was to biotech (2 percent net short).
Seligman’s largest longs at year-end were no different than in previous months: semiconductor equipment supplier Lam Research, semiconductor and infrastructure software supplier Broadcom, Google parent Alphabet (Class A shares), semiconductor equipment supplier Applied Materials, and Microsoft. In January, shares of Lam gained more than 5 percent, Broadcom rose by 5.7 percent, Alphabet was flat, Applied Materials climbed 1.4 percent, and Microsoft was up about 5.6 percent.
Seligman apparently was also boosted in January by at least one short position. II reported previously that Seligman had told clients in its November 27 report that it was enthusiastic about its short position in Tesla.
“Tesla has missed numbers all year, and a stale lineup of cars looks unlikely to change things any time soon,” the hedge fund said at the time. “At the same time, the company’s valuation remains stratospherically high; as numbers inevitably get cut, we see [the] stock as likely to fall significantly.”
Sure enough, shares of Tesla, which peaked on December 27, plummeted by 25 percent in January alone.
Seligman currently manages $2.2 billion in its long-short hedge fund and $16 billion in mutual funds. The hedge fund has compounded at a 13.1 percent net annualized rate since 2001.
