We know George Soros, an investment veteran for many different spheres of influence. Some know him as a successful investor which started in 1954, while others remember him for his activism influence. His successful use of global macro strategies showed his great understanding of global economic shifts. George Soros’s portfolio currently has 113 holdings valued at $3.2 billion, diversified in different sectors.
The largest share of Soros’ portfolio is concentrated in tech and healthcare industries, with investing in companies like Horizon Therapeutics, Activision Blizzard, Alphabet, and Novo Nordisk. He also has 53 calls and put options. The largest put options are in trust funds Invesco Capital and several BlackRock funds. Call options also include BlackRock ETFs and software companies like Splunk and Alteryx.
As we mentioned, Soros’ investing career started 70 years ago. To better understand his approach to investing and shifts in his strategies, we will dive deeper into Soros’ portfolio and historical performance.
George Soros Portfolio Current Holdings
- Horizon Pharmaceuticals Plc (NASDAQ:HZNP) with 12% of the portfolio
Soros started building this holding in Q4 2022 and on two occasions bought a total of 3.3 million shares. He did a minor sale of 2 thousand shares in Q3 2023, and his total investment into this holding is $285 million. The current value of this holding is at $383 million, resulting in a gain for Soros of 34%.
- Activision Blizzard (NASDAQ:ATVI) with 8.88% of the portfolio
This major game developer was a part of Soros’ portfolio from 2009. From that time he several times exited from this holding, and his latest influx was in Q3 2023. He bought 3 million shares at an average of $91.23. His total investment into these stocks is $274 million, and they gained some value bringing gains of 3.5%. Blizzard stock’s current value is $94.42.
- Alphabet Inc Class A (NASDAQ:GOOG) with 6.27% of the portfolio
Soros fund management first invested in Alphabet in Q4 2015 when they bought 1.31 million shares. Since then Soros bought shares on 13 and sold them on 12 occasions. Soros now owns 1.4 million shares valued at $200 million. Since his investment was $120 million, this investment resulted in a gain of 66% so far.
- Novo Nordisk (CPH:NOVO-B) with 5.44% of the portfolio
This Danish pharmaceutical giant is a new holding in Soros’ portfolio dating to Q3 2023. The price of their stock had a steady slow rise in the last two years, and when Soros acted, they were valued at $164.52. Right after the trade, the stock price plummeted to $91.30. That happened at the end of September, and since then they slightly recovered to $113.70. Soros invested $251 million into 1.53 million shares, whose current value is $173 million. For this short period, this holding resulted in a loss of 31%.
- Abcam – ADR (NASDAQ:ABCM) with 4.65% of the portfolio
Abcam is another recent addition to Soros’s portfolio since he bought the stake at the beginning of August 2023. They are a global leader in the supply of life science research tools and were bought by the Danaher Corporation in November. Soros bought 6.18 million shares for $143 million. The value of shares increased from $22.99 to $23.99 netting him a return of 4.3% so far.
- Aercap Holdings N.V. (NYSE:AER) with 4.56% of the portfolio
Aercap is one of rare Soros’ long-term investments dating back to Q4 2009. From that time he entered and exited this position several times. During 2023 he bought their stocks on three occasions raising his stake to 1.86 million shares. The stake cost him $114 million, and since then the value of stocks continued to rise. This holding is now valued at $145 million, bringing a gain of 28%.
- Amazon (NASDAQ:AMZN) with 4.12% of the portfolio
Since 2021 Soros bought Amazon stocks 4 times and sold them 7 times. He currently owns 764 thousand shares valued at $131 million. Soros invested in Amazon $116 million resulting in a gain of 14%. Amazon stocks have seen a steady rise in price since the beginning of 2023 when they were valued at $84, and now they are valued at $171.81.
- CRH Plc (NYSE:CRH) with 3.47% of the portfolio
This Dublin-based manufacturer and supplier of building materials is an August 2023 addition to Soros’s portfolio. He bought 2.07 million shares for $116 million. This holding saw a price decline, reducing the value of Soros’s investment to $111 million.
- Liberty Broadband Corp – Series C (NASDAQ:LBRDK) with 2.92% of the portfolio
Soros bought 2016 a total of 8.9 million shares, and since then he has been reducing his stake. His latest trade was in Q3 2022 when Soros sold 360 thousand shares at an average of $106.38. Since then the price went down to $66.88. Soros invested $81 million, and the value of this holding is now $93 million, resulting in a gain of 15%.
Sector Diversification in Soros’ Portfolio
Soros Fund Management is investing in companies from different industries, with a focus on the tech and healthcare sectors. Their current portfolio is diversified among these sectors:
- Technology with 30.1% of the portfolio valued at $960 million
- Healthcare with 24.8% of the portfolio valued at $792 million
- Finance with 8.8% of the portfolio valued at $281 million
- Consumer Discretionary with 8% of the portfolio valued at $250 million
- Real Estate with 5.3% of the portfolio valued at $169 million
- Materials with 4.1% of the portfolio valued at $130 million
- Industrials with 3% of the portfolio valued at $94.1 million
- Consumer Staples with 2.1% of the portfolio valued at $68.3 million
- Energy with 2% of the portfolio valued at $65 million
- Utilities with 1% of the portfolio valued at $32.9 million
- Companies that are not categorized in a specific sector take 10.6% of the portfolio valued at $336 million.
Genesis and Evolution of Soros’ Investment Philosophy
Key Principles Underpinning Soros’ Investment Decisions
Soros’ extensive knowledge of global markets, and the political configuration of all major powers, allowed him to reap benefits from global market shifts. This can be seen from his bet against the British pound in 1992 and Japan’s Juan in 1997 resulting in massive gains for Soros.
Besides his focus on global macro strategies, Soros is known as a short-term speculator. He often uses leverage to boost his already large bets on the direction of financial markets. He makes his bets on all sorts of securities, from currencies, and commodities to stocks, bonds, and derivatives.
This is where his first principle comes into play. When investing, he bets that the price of securities will go down or up. Soros lets the movement of different financial markets and their participants shape his trades. This is now called a “reflexivity theory”. By putting it simply, Soros uses market feedback to anticipate how the rest of the market will value the securities in question. This way he can aim to predict market bubbles and other crucial opportunities for a trade.
Soros also developed his unique strategy which is based on forecasting how the financial market will move in the future. He makes his bets on the current market data and begins testing with smaller investments at first. If he identifies his move as good, he increases his position, aiming to capitalize on gains. If his prediction didn’t yield results then he doesn’t increase his stake, keeping his risk at a minimum.
Unlike other investors who avoid listening to their inner feelings, Soros pays great attention to feedback that his body gives him. There were reported cases that if he felt an ache in the body after the investment, he would shortly after abandon the holding entirely.
Soros has extensive insight into the political situation and future development in most crucial countries. This can come in handy when choosing where and when to invest. This comes as a crucial element of his global macro approach. Without this knowledge and experience, his investments could not be so precisely timed and well-executed.
Another crucial principle that helped Soros to generate so good results, is surrounding himself with good advisors. He rarely makes investment decisions alone and likes to consult with advisors and analysts. He especially appreciates contrary views to his own. These help him reflect on his decisions. Often in these situations, he manages to see flaws in his arguments and make adjustments on time.
Take A Look At George Soros Philosophy of Trading:
Historical Performance and Significant Shifts
From the book “Soros: The World’s Most Influential Investors” we can see that in the period 1969-1994 returns were at an average 35% annually. This was the period when Stanley Druckenmiller played a major role in the fund and its operations.
After he left, returns were smaller, and Soros was the one making all the big decisions until 2011 when he stepped down from the chairman position of the Quantum fund. What is important to note is that these returns were not constant. The fund went through periods of major wins and losses, emphasizing the nature of its investment strategy.
From publicly available information we can see that George Soros Fund’s performance in the last three years generated a 3-year cumulative return of -45.67% for top 20 weighted holdings. In the same period, the S&P 500 generated 27.49% returns.
Although Soros never abandoned his investing goals, he made a significant shift in the late 90s. He founded an Open Society Foundation in 1984 which is organized as a grantmaking network. With time, it was branching out, and Soros decided to dedicate more time and resources to it.
In 2011 he stepped down from the chairman position in Quantum Fund Management, while he remained the chairman of Soros Fund Management, the parent company. Since then he hasn’t made many direct investment decisions. He was focused on the vision and direction of the fund, while the direct investment decisions were left to fund managers.
Strategic Insights and Future Outlook
George Soros handed over the control of the Open Society Foundation to his son Alexander in December 2022. This organization controls most of the $25 billion in their family office. He later stated that the Foundation’s manpower will be reduced by at least 40% and that it will shift its focus away from the European Union.
Regarding his involvement in the George Soros hedge fund, he is still the chairman, but he passed most of the decision-making to the CEO Dawn Fitzpatrick.
She pointed to the interest in bitcoin and other cryptocurrencies, but that they still need time to develop and find a spot in the global financial network.
Due to his age and preference for Open Society Foundation activities, his implications in the investment decisions will be minimal.
Implications for Individual Investors
Soros’s investment strategy is deemed very complex because an individual has to have extensive knowledge to pursue it with success. His short-term bets based on market movements are not easy to pull off. These can be very risky, ending in massive losses if an investor does not know how to assess the current market situation.
Using Soros’s strategy demands a unique set of skills, combined with extensive experience and connections on a global scale. When we put into the equation professionals that he employs in his hedge funds, which bring crucial elements to the table, using his methods seems almost impossible.
If you are thinking about starting your investment career, you could focus on a strategy that comes with less risk. Passive and value investing are good examples from where you can gather experience, and find the best approach for your investment career in the long term.
FAQs
Which Stocks Does George Soros Own?
Soros’s hedge fund portfolio is frequently changing due to its management strategy, and some of his largest holdings are recent buys. The biggest 5 holdings take up almost 40% of his portfolio:
- Horizon Pharmaceuticals Plc with 12% of the portfolio
- Activision Blizzard with 8.88% of the portfolio
- Alphabet Inc Class A with 6.27% of the portfolio
- Novo Nordisk with 5.44% of the portfolio
- Abcam – ADR with 4.65% of the portfolio
- Aercap Holdings N.V. with 4.56% of the portfolio
- Amazon with 4.12% of the portfolio.
What Is George Soros’s Investing Strategy?
At the core of Goerge Soros’ investing strategy is a so-called reflexivity. By it, Soros points out that markets are irrational and that the participants in the stock market influence asset prices. Soros through most of his career was finding ways to exploit misperceptions of the market.
The first step is to identify the market distortions caused by either the emotional sentiment of the traders or by the herd mentality. Then the price of the asset can jump way above its intrinsic value.
Then, the second cornerstone of his strategy comes into play. He is a short seller and does not look for ways to profit in the long term. Once he identifies the assets that are overvalued, he places a bet that their value will go down to their original positions.
To be able to exploit the market he uses his top-down approach and analyzes not only economic but also social and political trends all across the world. With this, he can predict macroeconomic factors. With his understanding of world politics and how social changes can impact society, he can anticipate shifts in economic trends.
While he prioritizes analyzing global economic variables, he is not forgetting to analyze the companies he invests in. Soros checks the fundamentals of the company, its cash flow, and competitor analysis and tries to find any potential competitive edge.
Since Soros’ approach is often very risky, he cannot forget the importance of risk management. One of the lines of defense is the use of derivatives to offset risks connected with his primary positions.
Also, he employs stop/loss orders to limit potential losses. And, he prefers diversification and position sizing, so in case a sector is hit, that doesn’t make a major dent in the whole portfolio.
How Did George Soros Make Most of His Money?
Most of the money Soros earned while he managed Soros Fund Management. He founded it in 1970 and 1973 renamed it Quantum Fund. Among others, in those times he worked with investment gurus like Stanley Druckenmiller and Jim Rogers.
Between 1973 and 1981 the fund grew from $12 million to $400 million. One of the major wins was the bet against the pound sterling in 1992. From that bold bet Soros alone made $1 billion. Between 1973 and 2013 the fund generated $40 billion making it one of the most successful hedge funds in history.
Is George Soros a Value Investor?
No, George Soros is not a value investor. Although he pays special attention to conducting fundamental analysis and identifying undervalued assets, the rest of his approach is completely different from value investing.
While value investors conduct deep and fundamental analyses of the target companies, he is doing that on a macro scale. He is analyzing political implications, economic shifts, and currency fluctuations. Based on those analyses he tends to make bets against a whole class of securities like a currency.
While value investors prefer a long-term investment horizon, Soros is focused on short-term gain. This is understandable since his investment approach is based on capitalizing on market mispricings, and sudden shifts in industrial sectors.
Another crucial difference is in achieved returns. While value investors aim for modest but safe returns over prolonged periods, Soros is searching for opportunities to earn high returns in the short term.
This can also be seen when analyzing his historical performance. There are periods when his hedge fund generated impressive returns, but also, in some periods it underperformed when compared to other market benchmarks.
Final Thoughts
While George Soros is considered to be a controversial figure by many, both for his activist practices and his investment approach, he is undoubtedly one of the investment gurus who made a difference in the long run.
His portfolio is prone to changing, and in 2023 we saw that he exited from several tech companies. The most noticeable were exits from Microsoft, MongoDB, Nvidia, and Rapid7. He reinvested his capital into Chinese e-commerce giant Alibaba, RenaissanceRe Holdings, and Ametek Inc.
Last year didn’t bring the expected returns for Soros’ investors, but he started a new year strong and shuffled his holdings deck. We will have to wait out and see will he and his team make any major changes soon.
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