Jim Simons’ Portfolio: A Blueprint For Wealth Accumulation

The story of a successful mathematician and university professor turned investor is an inspiration for many. His input had a major contribution to developing quantitative investing and the popularization of high-frequency trading. Simons founded and is managing Renaissance Technologies and its flagship fund, Medallion. Medallion has been outperforming the S&P 500 for decades. In this piece, we will look at funds portfolio holdings and their recent performance.

Renaissance Technologies has a $66.5 billion portfolio that is highly sector-diversified. However, the company, in the last couple of years, put a focus on tech and pharmaceuticals. The biggest holdings from the pharma sector are Novo Nordisk, United Therapeutics, and Vertex Pharmaceuticals. From the tech sector, Apple, Palantir, Microsoft, and Verisign have major stakes in their portfolios.

Jim Simons sadly passed away in May 2024, leaving behind a substantial academic work in the fields of mathematics and a fruitful investing career. To better understand Simon's substantial returns, we need to dive deeper into his investment approach. For a better understanding of Renaissance Technologies current portfolio holdings and their investment process, stay with us.

Key Takeaways

• Jim Simons was a renowed mathematican and pioneer in the quantitative investing that used mathematical models, statistical analysis and algorithms to identify potential investment targets.
• His company, Renaissance Technologies, and particularly its flagship fund, Medallion, constantly deliver high returns. Medallion, a closed fund, annually on average generates 39% gains net of fees.
• The current Renaissance Technologies portfolio has $66.5 billion in AUM that is highly diversified. The top 20 positions take 83% of the overall portfolio.

Jim Simons’ Current Portfolio Holdings

Jim Simmons, the founder of Renaissance Technologies hedge fund that currently has over $66.5 billion, has a very diversified portfolio. Only 6 of his holdings have a stake of 1% or higher in Simon's entire portfolio. These are:

• Palantir Technologies Inc. (NYSE:PLTR) with 2.15% of the portfolio

Palantir, as a major innovative force in the tech sector, has drawn several big-name investors in recent years. Renaissance Technologies has been investing in Palantir since Q2 2021, and a year ago this position was worth $731 million. However, Palantir stocks witnessed a surge in price for the past year, with the rising trend in the last quarter. This is mostly as a result of exceptional earning in the last quarter that pushed the stock price up from ~$40 to ~$100.

This trend brought Renaissance Technologies high gains, and his position in the company is now valued at $1.43 billion. At the same time, he trimmed down the position from around 43 million shares to the current 38.4 million shares in the past year.

• Novo Nordisk A/S (NYSE:NVO) with 1.47% of the portfolio

This pharmaceutical company from Denmark has been a regular part of Simons's portfolio since late 2013. From mid-2020, Renaissance Technologies had been offloading its stocks, and this trend continued even after our last report. Renaissance Technologies LLC reduced the holding in the past year from ~14 million to ~8 million shares, reducing the share of the portfolio from 2.73% to 1.47%.

Novo Nordisk stock peaked in mid 2024 with ~1000 DDK price tag, while today it has fallen to about 625 DDK. The value of the holding is at $975 million, and despite the recent fall in price, it is still a highly profitable investment.

• United Therapeutics Corp. (NASDAQ:UTHR) with 1.16% of the portfolio

UTHR stock has been another element of the Renaissance Technologies portfolio for years. In 2024 it gained about 55% of the value with its price jumping from ~$225 to ~$350. The company owns 2.16 million shares valued at $772 million, and there haven't been many activities in this holding.

The company reported record revenue of $715 million in Q2 2024, while the company's management has high hopes for the future due to several new drugs being in the late stages of development.

• Apple Inc. (NASDAQ:AAPL) with 1.15% of the portfolio

Another long-time part of Renaissance Technologies portfolio dating to 2013. Since our last report, the company trimmed this position from 4.1 million to 3.28 million shares. This is actually an upward trend from Q1 2024, when they owned just ~400 thousand Apple shares. The value of the position is at $763 million, and the recent buys did lower the overall gains from the holding due to the high stock price.

• Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) with 1.14% of the portfolio

This Boston-based biopharmaceutical company has been a part of Renaissance Technologies portfolio since Q3 2013. In the past year, the fund kept their position at almost identical levels, with 1.63 million shares in the holding.

The price tag of the position is $758 million, and after a dip in value that the stock experienced in the second part of December 2024 and the beginning of 2025, things are starting to go back to normal. VRTX share is now priced at $482, which comes after its peak of $516 in November.

He is the single biggest owner of their stocks, currently holding 1.66 million. The holding is valued at $721 million, and the total investment is worth $307 million. This holding has proven to be a good long-term choice since it has netted 135% gains so far.

• Microsoft (NASDAQ:MSFT) with 1.02% of the portfolio

Renaissance Technologies exited from Microsoft in Q4 2023, selling 1.16 million shares. They restarted trading their stock in Q2 when they acquired 320 thousand shares, and a quarter later they bought another 1.25 million shares, equaling the value of the holding to $676 million.

Due to the current price trend, this old/new investment will demand some time to show results, but if it continues to continue in the same trend, it will not take long to become profitable.

• Verisign, Inc. (NASDAQ:VRSN) with 0.91% of the portfolio

Verisign is another company from the fund's portfolio that is coming from the healthcare sector. It has its ups and downs, and it still cannot restore its stock value to peak levels from 2021. In the last year after the last report, the fund didn't make any significant moves, and the stock did continue to lose its value.

In 2024 it fell to $168, but since November it has shown signs of recovery, reaching the current $220. The value of the position did fall from $632 million to $603 million, while its size remained practically the same.

• Sprouts Farmers Market Inc. (NASDAQ:SFM) with 0.74% of the portfolio

SFM is a supermarket chain coming from Phoenix, Arizona, and due to its surge in value, it has become one of the crucial positions in the Renaissance Technologies portfolio. They did not conduct any major buys or sells last year, but its price only in 2024 reached new highs, moving from $48 to $135 in a year. The stock did stall a bit in the beginning of 2025, but already now it has jumped to $169. The company owns 4.44 million shares with a price tag of $490 million.

• Airbnb Inc. (NASDAQ:ABNB) with 0.69% of the portfolio

Airbnb is one of the few large investments that still need to bear fruit. On average, Renaissance Technologies paid their stocks $132, while its current price is ~$130. The fund owns 3.62 million shares after a slight trimming of the position, which two quarters ago had 4.42 million shares. The value of the position is $458 million. The stock is constantly losing value after its last peak in the beginning of 2022.

• NVIDIA Corp (NASDAQ:NVDA) with 1.04% of the portfolio

Renaissance in Q1 2024 sold the majority of NVDA holdings, leaving only 5.5 million out of 15 million shares. This way they lost a great opportunity, since NVDA's price at that time started to really grow. Currently they own just 3.5 million shares valued at $428 million. Nonetheless, it brought massive gains since the fund bought them for $52 on average.

Jim Simons’ Investment Strategy

Jim Simons was known as a quantitative trading pioneer. To fully understand what he brought into the field, we need to go a bit back through history. Simons earned a B.S. degree in Mathematics from MIT in 1958, and he got a Ph.D. in the same field in Berkeley back in 1961.

During the Vietnam War, Simons worked for the National Security Agency as a codebreaker. After that, he switched to teaching and took professor positions at MIT and Harvard. As a pinnacle of his educational career, he was appointed as chairman of the mathematics department at Stony Brook University.

In 1978, Simons founded a hedge fund named Monemetrics. During work in finance, he realized how his mathematical knowledge could be applied to trading in the financial markets. While he worked as a codebreaker, he gained detailed insight into pattern recognition. He quickly identified the potential that this knowledge can offer in trading.

He was the first hedge fund manager to implement quantitative analysis into his investment strategy at that scale. This approach earned him the nickname “Quant King.”.

Quantitative Trading

Soon after his work at Monemetrics in 1982, he founded another hedge fund. He called it Renaissance Technologies (RenTec), and the rest is history. His mathematics and educational background allowed him to attract the top math, physics, and computer science talents. They formed a team that was focused on developing quantitative models used for trading.

Both RenTec and its flagship fund, the Medallion, achieved significant returns year after year. This overachievement can be attributed to several factors that are based on combining math and computer sciences.

Simons and his partners focused on gathering massive amounts of data. After proper analysis, this data can be used for identifying and exploiting price discrepancies between similar assets.

Simon's approach heavily relied on high-frequency trading. This approach allowed him to gain massive returns on millisecond trades, earning from short-term market inefficiencies.

He and his team often developed and used data-driven algorithms combined with complex models to identify potential investment targets.

After Simons and his team started employing quantitative trading, other investment companies realized their potential. This triggered a boom in the investment world, where all major investors started implementing quantitative and HFT trading in their strategies.

This increased the need for professionals from the math and computer science fields, resulting in the pouring of new talent and capital into investment companies.

The HFT strategy, which came out of this development is often deemed as unethical. Many critics point out that it gives an unfair advantage to large companies that can afford to employ talent and use this tech.

But, in the end, most of his work in quantitative trading and his use of mathematical knowledge are hidden from the public. Rumors were heard that even coders behind the algorithmic trading programs didn't know what exact logic was behind them.

Mathematical Models

The core of every successful mathematical model is data. Vast amounts of it. Simons understood how important it is to gather as much data from several relevant fields to be able to identify trading and price patterns. He focused on diverse sources of data ranging from stock prices, trade volumes, news feeds, and all sorts of economic indicators.

In the late 80s, he worked together with James Ax, later a partner in founding Renaissance Technologies. After several failed attempts, they created a first model with data gathered from the World Bank and Federal Reserve dating back to the 1700s. That quantity of data allowed them to identify patterns of trading movements that repeat in cycles.

With the use of this model, it is possible to predict price movements and earn from them. One other good feature, which is the key to the whole approach, is that the model is dynamic and adjustable. Parameters change with time, and they can be modified and applied to the model.

Buffett and Soros devised their models, and they brought them annual returns in a range of 29% and 32%. Simons's model averaged over 66% of returns in three decades, so his model is proven to be the most successful.

Data-Driven Analysis

As a part of his wider mathematical model strategy, collecting data is essential. Data is analyzed with algorithms for any subtle price discrepancies between similar assets or in related markets.

Machine learning models used for analysis employ different techniques, including:

• Time series analysis that helps with predicting future trends
• Regression analysis, which is used for identifying relationships between variables
• An unsupervised learning method is used for uncovering hidden patterns and groupings.

These models are usually employed for HFT trading, where trades are conducted at lightning speeds. These models can quickly recognize new patterns and make trading decisions based on short-term signals.

Success Stories of Jim Simons’ Portfolio

Soon after forming, RenTec Simons and Ax worked on expanding the original Leonard Baum's models for use in trading. Together in 1988, they started a core RenTec fund, the Medallion. Initially, the success of their model was overwhelming; however, by April 1989, the tables turned, and the losses rose to 30%.

Simons and Ax had a series of talks about the future investment strategy of the fund. Simons wanted to reevaluate the model, and Ax pushed to continue using the same approach. Simons was the majority owner, so Ax departed.

Soon after, Simons teamed up with Elwyn Berlekamp, a Berkeley professor, to run Medallion. He bought the majority of Ax shares and, together with Henry Laufer, redesigned Medallion's trading system. For this operation, it took them 6 months, and during 1990 they generated 55.9% gains. After that he sold his share of stocks to Simons for six times what he paid for them and returned to the university.

Simons took over Berlekamp's place and ran the adjusted system. In 1992 it generated 34% gains, and a year later 39.1%. In a period between 1994 and 2014, it achieved an average annual 71.8% return. During the 2020s, the returns further increased to an average rate of 76%.

The Medallion Fund has been closed for new investors since 1993. Only Medallion's past and current employees and their families have an opportunity to invest in the fund. The fund bought up the last old investor in 2005. Out of about 275 employees, 100 have a status of qualified purchasers, which means that their net worth is at least $5 million. The rest of the employees are accredited investors valued at a minimum of $1 million.

When we take all history performance data, we come to a figure of over $100 billion earned by this fund for their investors. Between January 1993 and April 2005, the fund had only 17 negative months and three losing quarters. These performances had not been achieved by any other hedge fund.

One factor that can be attributed to this consistent overachieving is Simon's approach to investing. In all funds that he managed, hedge fund managers do not make investment decisions based on their emotions and personal judgment. The crucial trigger for an investment decision lies in the numbers that come as a result of mathematical algorithms and the massive amounts of data they use.

Take A Look At Jim Simons’ Trading Strategy Explained:

Portfolio Management

Asset Classes

RenTec's portfolio is highly diversified, both by utilizing different asset classes and by not limiting themselves to a specific geographic region.

RenTec managers invest in equities like stocks from markets all across the globe. They utilize both small- and large-cap investments.

Their approach to trading currencies is by focusing on exploiting price fluctuations when trading in major and minor currency pairs. Recently, the also included trading cryptocurrencies in his portfolio.

Their diversified portfolio often includes commodities. Energy commodities like oil and natural gas offer a diversification edge that brings additional resilience of the portfolio to the market volatility.

Precious metals like gold and silver and actively traded agricultural products are also frequently traded. They are suitable for high-frequency trading and short-term earning opportunities.

An important factor to consider when it comes to investment targets is the liquidity of assets. Jim Simons does not frequently resort to investing in illiquid assets and prefers highly liquid assets.

This is due to his core high-frequency trading strategy, which requires trading with liquid assets.

Usually, trades are conducted very fast, and in these situations, there is no place for illiquid assets.

RenTec in October 2023 launched the Renaissance Institutional Futures Fund, implying funds raised interest in investing beyond traditional asset classes.

Risk Management

The first risk mitigation principle that Jim Simons upheld is high diversification. Renaissance Technologies funds spread their investments across different asset classes, markets, and sometimes individual security types.

They are a globally oriented corporation, which means that their investments are hitting all major global markets, further minimizing risk from sudden market twists. With this dense diversification, the fund lowers the risk of major losses.

By avoiding concentration and taking large positions, the risk of investment is even lower. Their use of position-sizing strategies is actively limiting the size of capital that is allocated for specific investments. By doing so, if even a certain holding is going through a rough patch, it would not have a major impact on the whole portfolio.

As a final security system, the use of stop-loss orders is limiting potentially high losses in unpredicted risk cases.

RenTec risk management teams are also well aware of the importance of stress testing. Before they decide to commit larger amounts of capital into a holding, they test it in different ways. They subject the target investment to different market conditions and monitor how it would hold against it. Only after it passes the tests is the investment considered.

But an often disregarded factor, the monitoring of the performance, is not forgotten. Both managers and algorithms are monitoring the current condition of all holdings, making necessary adjustments accordingly.

Diversification

Jim Simons heavily relied on diversification as a risk management strategy. He didn't prefer large holdings, and his portfolio usually had several thousand small holdings. He diversified all the investments across the board, both in assets and geographically, resulting in minimal risk for losses.

Simons also aimed to diversify the portfolio by industries. His company's current portfolio has this industry structure:

• Technology: 21.3% of the portfolio
• Consumer Discretionary: 20.6% of the portfolio
• Healthcare: 17.1% of the portfolio
• Finance: 11% of the portfolio
• Industrials: 6.65% of the portfolio
• Consumer Staples: 3.88% of the portfolio
• Real Estate: 2.99% of the portfolio.

Lessons from Jim Simons

Key Takeaways

By analyzing his long and productive career, we can identify stepping stones that can help anyone who wants to start quantitative trading. Some key takeaways from this approach include:

• Focus on data and analytics. RenTec access to data may be out of your reach, but do not forget that analyzing data is essential. Finding large and relevant batches of data allows you to identify potential trading and price variation patterns. Using algorithms to analyze data gives the best results, and from there you can start working on your models, which you will follow.
• Using a quantitative approach. Quantitative approaches and their models are complex and demand solid mathematical knowledge. But one of their often-overlooked benefits is making more objective investment decisions. Start with using tools and resources for quantitative analysis that are closer to your current knowledge level.
• Diversification is a priority. Although Jim Simons used his preferred strategies, he never forgot the power of diversification. Diversification in asset classes, and if possible in the geographic sense, brings lower risk to the portfolio.
• Invest in liquid assets. If you want to follow the road of Jim Simons, you would not relate to investing in debt and other types of illiquid assets. For quick sales, you must have a portfolio made of highly liquid holdings.
• Be ready for constant learning and adaptation. This is especially the case when focusing strategy on a quantitative approach and use of algorithms. Be ready to refine the algorithms and always stay on top of current market trends.

Investment Tips

Jim Simons has five guiding principles in life from which novice investors can learn a lot:

• Don't follow the crowd. Originality is key.
• Partner with good people. The task is too big for one person to handle alone.
• Let beauty guide you. There is beauty in math. Well-run businesses are beautiful.
• It takes persistence. It takes time for good things to become a reality.
• Neither good nor bad luck can be avoided. Just hope for good fortune.

Among these tips, he offered several tips in the book The Man Who Solved The Market by Gregory Zuckerman. Both experienced and beginner traders can learn from these:

• Aim for the market-neutral portfolio.
• Trade frequently
• Trade in different markets to get uncorrelated returns.
• Diversify to different markets and time frames.
• Many data points are required to make a meaningful trading/investment strategy.
• The logical strategies are arbored away.
• Mean reversion is the lowest-hanging fruit.
• Leverage bites
• Most quant traders fail.

Case Studies

Notable Investments

We will pay special attention to recent investments that brought significant returns.

Although a small investment in Soleno Therapeutics Holdings brought him a massive gain of 3705%. Simons invested a mere $67.6 thousand into this, and he managed to turn that investment into $2.57 million.

Jim Simons's investment into Camtek Ltd., a manufacturer of meteorology and inspection equipment, netted him 1227% gains. His total investment into this holding was $3.32 million, and Simons turned it into $46.4 million.

Corvel, a provider of risk management solutions for work compensation, auto, health, and disability management industries, was another hit. Simons invested a total of $23.3 million and made $167 million so far.

UFP Technologies, the manufacturer of medical device packaging solutions and medical components, is one of the highest-grossing holdings. Simons has been trading their stocks since 2013, and he invested a total of $8.96 million. He turned this investment into a gain of 535% and $56.9 million.

Performance Analysis

Jim Simons funds are known for their high return rates. He didn't have a negative year back from 1989, and returns were always higher than 30%. His best years were 2000, 2007, and 2008, with 128.1%, 136.6%, and 152.1% returns.

In the 90s, the returns fluctuated between 31.5% and 93.4%, and many thought that no one could beat that. But in the last decade, Simons fund delivered even more. Between 2010 and 2018, the lowest return was in 2010 with 57.5%, and the highest in 2013 with 88.8%.

When combining data between 1988 and 2018, the average gross returns of Jim Simons fund were 66.1% before fees. No one managed to deliver those kinds of returns so constantly. Even giants like George Soros, Ken Griffin, and Ray Dalio cannot compete with these numbers.

FAQs

Closing Remarks

When thinking about successful hedge fund managers, it is impossible to overlook Jim Simons. He revolutionized the investment process by implementing complex mathematical models and, more recently, machine learning. His core principle, which is based on analyzing vast amounts of data and using them to create mathematical models, has proven to be very effective.

His portfolio outperformed everybody in a three-decade period. No one came even close. Critics often point out the unfair advantage that large companies have over retail investors, and maybe they do have a point. But still, as time goes by, funds managed by Simons are creating even higher returns.

A career and approach that certainly demands a deep analysis, but since most of the crucial data is not available to the public, we can ponder about and try to figure out what he was doing so right.

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