The US public equities strategies of Saudi Arabia's Public Investment Fund (PIF) and Singapore's Temasek witnessed some convergence in Q121 with greater exposure to tech-related sectors and away from energy stocks.
PIF ramped up its US public equity portfolio to new highs in Q121 with US$15.45 billion of holdings – up 21% over end-Q420 and 58% above the same moment in 2020. After a period of mixed messages over the fund’s strategy, clear trends are emerging that point to a strategy oriented towards stocks that are set to benefit most from the post-pandemic recovery as well as the disruption caused by the crisis, particularly in tech-oriented sectors.
The Saudi fund ramped up its exposure to retail and consumer stocks, which grew from 64% to 75% of total US public equity holdings compared to end-2020. Increases included an increase of US$1.72 billion in the value of its stake in Activision as it increased its number of shares in the company by 124%. Another notable increase in the sector was the near doubling of its stake in Electronic Arts, which grew 79% in value to US$1.92 billion.
At the same time, it slashed its exposure to energy and natural resources stocks, including divesting its stake in Suncor, which was worth US$855 million at the end of December. Consistent themes remain its stockholding in Uber, the ride-hailing app, which still represents its largest shareholding at US$3.97 billion (+7%), as well as a stake in cruiseliner Carnival, at US$1.35 billion (+23%), despite the impact of the pandemic on the travel sector. It also held onto an ETF focusing on utilities, worth US$2.11 billion (+2%).
The purchases follow a trend seen in the previous quarter when it invested US$3.3 billion in video game and entertainment stocks with a drive to gain exposure to a fast-growing e-games market, which has flourished amid lockdowns.
Temasek also appeared to be going in the same direction with a US$900 million investment in Roblox, a video games company. It has amassed a portfolio worth US$25.5 billion, almost double as much as the same time in 2020 and nearly 10% up on end-Q420.
Growth in the past quarter was related to a 22.5% increase in TMT stocks to US$8.23 billion, representing 32% of the portfolio – slightly reversing a trend seen over 2020 when the sector went from 48% to 29%.
The Singaporean state-owned investor also reported 7.4% growth in financial sector stocks to US$12 billion – the biggest sector in its US equities portfolio at 47% of total shares, up from 29% at end-March 2020. In terms of individual counters, over Q121 the value of its holding in Lumen Technology rose 37% to US$1.3 billion, while the value of its Mastercard holding grew 20% to just over US$1 billion.
