Hedge funds tend to tip their collective caps to small companies, which may explain why large stocks cant seem to outperform their punier peers, a Goldman Sachs analysis reveals. In fact, hedge funds invest more than twice their assets in smaller companies than mutual funds do, 42% vs. under 20%. In addition, according to the Goldman analysis of 550 hedge funds with $650 billion AUM, hedgies had under 16% of their assets in companies with market value of more than $50 billion, while mutual funds invested 30%. There was another revelatory result in the survey: Hedge funds tend to hold on to their positions a lot longer than popularly believed. The term fast money does not accurately describe the investment strategy of most hedge funds, according to the report, which notes that nearly two-third of HFs studied did not change their positions in the quarter studied. One last thing: hedge funds tend to invest in consumer-discretionary, materials and information technology sectors, and are dramatically underweight in financial and consumer staple stocks.