Stocks most owned by hedge funds and mutual funds managing more than $3 trillion are handily beating the market this year, according to Goldman Sachs.
Technology is by far the favorite sector of professional investors, with hedge funds increasing their bets in the space last quarter by a large amount.
&#8220;Follow the proverbial &#8216;smart money.&#8217; The favorite stocks shared by both mutual fund and hedge funds have generated higher median YTD returns than the consensus most out-of-favor stocks,&#8221; strategist David Kostin wrote in a note to clients Friday.
The firm&#8217;s basket of 13 companies, which are on both the Goldman &#8220;Hedge Fund VIP&#8221; and &#8220;Mutual Fund Overweight Positions&#8221; lists, rallied 21 percent this year through Friday versus the <a class="inline_quotes" href="http://data.cnbc.com/quotes/.SPX" target="_self" data-gdsid="593933" data-inline-quote-symbol=".SPX">S&amp;P 500&#8217;s</a> 9 percent return.
Here are the 13 stocks hedge funds and mutual funds are betting on. Goldman says its analysis covers $1.9 trillion in hedge fund assets and $1.3 trillion in large cap mutual fund assets.
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Goldman noted that technology is the favorite sector by far of professional investors. Hedge funds particularly love the &#8220;FAANG&#8221; stocks: <a class="inline_quotes" href="http://data.cnbc.com/quotes/FB" target="_self" data-gdsid="139619" data-inline-quote-symbol="FB">Facebook</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a>, <a class="inline_quotes" href="http://data.cnbc.com/quotes/NFLX" target="_self" data-gdsid="26444" data-inline-quote-symbol="NFLX">Netflix</a> and Google parent <a class="inline_quotes" href="http://data.cnbc.com/quotes/GOOGL" target="_self" data-gdsid="19004" data-inline-quote-symbol="GOOGL">Alphabet</a>, the firm said.
Hedge funds are increasing their bets on technology, while mutual funds appear to be taking some profits, according to Goldman.
&#8220;Hedge fund managers increased net positioning in Info Tech by 82 bp, ending the quarter 352 bp [basis points] overweight relative to the Russell 3000 (25% vs. 21%),&#8221; the report said.
http://cnbc.africa/news/2016/11/19/wealthy-families-investments/
The two big money manager classes don&#8217;t agree on everything, according to the Goldman report. The financial sector is the most underweight group among hedge funds, but it is the second-most overweight sector by mutual funds, the report said.
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.
Reporting by <a href="http://www.cnbc.com/tae-kim/" rel="author">Tae Kim</a> | <a href="http://twitter.com/firstadopter">@firstadopter</a>

Goldman: Follow the ‘smart money’ because the stocks most loved by pro investors are crushing the market

Amazon’s latest revelations showcase how it wants to own a sector worth trillions. But we have the technology to innovate in the pharmaceutical space before Amazon comes and does it for us, writes Nnamdi Oranye.
Amazon’s disruption in the retail and logistics space is unprecedented and in need of no introduction. However, in its typical style, while everyone has been focusing on what we perceive to be its core business, it has quietly been thinking of swallowing a completely different industry – in this case, pharmaceuticals.
I have the great privilege of being invited to conferences and think-tanks all over the world, and towards the latter end of 2016 I started noticing Amazon making certain moves that made me reiterate several times and in several places that it will be moving into this space. I was met with some scepticism. After returning from the Forum on Public-Private Partnerships for Global Health and Safety in Washington D.C. a few weeks ago, where I raised the point again, I opened up my news sources the day after landing back in South Africa to find CNBC had just confirmed what I suspected all along. Amazon had announced that it will be hiring a general manager to pave its path for entering into the pharmaceutical space. The report revealed that, apparently, entering into this space had been in Amazon’s discussions for a number of years. That means you can believe it has a serious plan it place.
This all makes perfect sense and to be honest we shouldn’t really be surprised anymore. Silicon Valley wants to connect everything, and Amazon certainly has a track record of wanting to own just about everything. One of the reasons why Silicon Valley has gone this way, in my opinion, is it has assimilated a vision of connecting industries and innovations together. Since the early days as just a bunch of professors and students at Stanford with a vision, Silicon Valley has nurtured this sort of thinking – finding ways to connect their innovations to existing industries. That’s what made the original “outfit in a garage”, Hewlett Packard, so successful. And today they continue to do the same.
<h3>Last mile of logistics</h3>
Here’s why Amazon moving into this space makes a lot of sense. It has been relentless in trying to solve the ‘last mile of logistics’ problem. With drone technology, it can literally deliver to pretty much anywhere in the world. Why wouldn’t it look to deliver pharmaceuticals as well? It has already been in this market in some ways, selling equipment and medical supplies, and interestingly offering cloud services to the biotech and pharmaceutical industry.
An example of Amazon’s vision comes from rural Africa, actually. Here we have an obvious challenge with the “last mile” problem — the movement of goods from the supply depot to the consumer’s home, or wherever the consumer may be. Amazon has been exploring drone technology for a long time, and the truth is so have we, but in unexpected places. For some time, UNICEF has been piloting a project in Malawi, with the aim of delivering medical supplies and picking up blood samples. This has obvious tremendous benefit to rural communities. Through the use of a smartphone, health workers can call a drone to drop off or collect supplies – and with a simple swipe of the screen ensure location services are on, so it can use their GPS location. When the drone arrives, they just tell the drone where to go on the phone, and off it goes. It can carry up to one kilogram of goods. In Tanzania and Ghana, the drones are also being used to carry off birth registration forms from rural areas to the nearest Home Affairs.
I find it interesting that a humanitarian organisation that focuses on developmental assistance to children and mothers is developing and piloting this project – and is actually looking for commercial investors to get involved. Pharmaceuticals, in my opinion, should be among the first to get involved. Home-grown companies involved in that supply chain should be getting in there now, as far as I’m concerned. There is no need to reinvent or come up with technology – everything requires is there already. But, it seems to me, Amazon will beat them to the punch.
<h3>Red tape and regulations</h3>
Amazon is already selling certain kinds of health equipment and medicine already. While it is true that the distribution of medicine comes with legitimate red tape and regulations that would all be new for Amazon, I am sure they will find a way. I can already imagine legitimate systems that would work &#8211; say, an app a doctor or health worker can download via a medical aid such as Discovery Health. Instead of writing you a prescription, the doctor just accesses the app, taps on the medicine he is prescribing, and the transaction goes through your health insurance at the same time as an order goes to Amazon. No need to go to a pharmacy. No need to ask the doctor to write another prescription if you lose the original &#8211; or need more medicine (he can obviously create a recurring prescription, or could put a future prescription on standby, or just create another prescription if you need it, and run it all through the app). Or if you don’t have health insurance, he could put the prescription through to Amazon who asks for your Amazon account details, and then send you a confirmation you just have to tap to purchase. Amazon’s ‘one-click’ buying system, and its ability to make payment almost invisible, will make this all seem a pleasure for us as consumers. Whatever the case, your medicine could be on your doorstep by the time you get home; or it could just get delivered to wherever you are, if you turn location services on and let its drone track your GPS signal. So if you’re away on a business trip or at a holiday home, or live out in a rural village, Amazon will find you and deliver to you your medicine.
Think about how such a simple system could work – using existing technology. It’s only the legalities standing in the way. Steve Kraus, a health tech investor with Bessemer Venture Partners, and expert in the field, is confident that Amazon could break open the pharmaceutical space. In his view, reports CNBC, every major technology company should have a play in health care, an estimated $3 trillion sector. The news of Amazon’s foray into this industry saw pharmacy stocks in other companies drop by the next day, but as Kraus says, it’s not just pharmaceuticals who should be worried. In the future, Amazon could work directly with manufacturers, become a distributor, negotiate discounts, and have such big buying power that most of us will just rather buy there as it will be so much cheaper. &#8220;In Amazon style,” Kraus said to CNBC, “it will want to own the consumer&#8217;s mind and wallet.”
<h3>Thinking without borders</h3>
In my opinion, this is how our innovators ought to be thinking. How do we own the consumer’s mind and wallet? How do we think without borders? We might not be able to compete with Amazon and Silicon Valley companies head-on, and in fact, if Amazon brings the kind of solution I’ve highlighted above to Africa, it will benefit us greatly. Having said that, however, we need to make sure we have the right framework in place so that Amazon’s role on our continent in pharmaceuticals sees us benefit economically as well as from a health point of view. Otherwise, it is just monopolising. It will cannibalise whole industries, supply chains, and expertise before we even realise it.
UNICEF’s example shows we can do this. We just need to invest, move quicker, get the right innovators involved, and think how we can connect it all together. Amazon has a few years to work out the red tape in its own context in the States and other places, but we can work out our own red tape here in Africa before they come. In fact, maybe we could even help them and then have a stake in it all – if we could just get a move on.

Amazon poised to disrupt pharmaceuticals

Christina Farr | @chrissyfarr
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<li>Each year, Amazon holds an annual meeting to discuss whether it should break into the pharmacy market, said a source familiar.</li>
<li>This year, it is getting more serious and is looking to hire a general manager.</li>
<li>Industry experts say this could be a multibillion market opportunity for the e-commerce company.</li>
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<a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a> is hiring a business lead to figure out how the company can break into the multibillion-dollar pharmacy market.
For the last few years, Amazon has held at least one annual meeting at its Seattle, WA headquarters to discuss whether it should enter the pharmacy business, says two people familiar with the company&#8217;s plans.
But this year, with the rise of high-deductible plans and the trend towards consumers paying for health care, it is ready to get more serious.
Two people said that it&#8217;s not a done deal that Amazon will move into this space, given the complex web of established players. But it is bringing on a new general manager to lead the team and formulate a strategy, and is deep in discussions with industry experts. That hire would sit under the consumables business, the source said.
Another person said it&#8217;s started to recruit more broadly from the pharmacy space.
The company recently started <a class="inline_asset" title="https://www.amazon.com/Medical-Supplies-Equipment-Health-Care/b?ie=UTF8&amp;node=3775161" href="https://www.amazon.com/Medical-Supplies-Equipment-Health-Care/b?ie=UTF8&amp;node=3775161" target="_self">selling medical supplies and equipment</a> in the U.S., and <a class="inline_asset" title="https://www.amazon.jobs/en-gb/jobs/529509" href="https://www.amazon.jobs/en-gb/jobs/529509" target="_self">is hiring for its</a> &#8220;professional health care program&#8221; to ensure that the company is meeting regulatory requirements. It also hired Mark Lyons two months ago from Premera Blue Cross. A source said that Lyons is tasked with building an internal pharmacy benefits manager for Amazon employees, which might be later scaled out.
Amazon declined to comment.
<a class="inline_asset" title="http://www.japantimes.co.jp/news/2017/04/19/business/amazon-launches-same-day-delivery-service-for-food-and-medicine/" href="http://www.japantimes.co.jp/news/2017/04/19/business/amazon-launches-same-day-delivery-service-for-food-and-medicine/" target="_self">Japan Times reported</a> in April of this year that the company expanded its Prime Now delivery service to include drug and cosmetic sales, with the support of local partners. Amazon&#8217;s category page on its Japanese site now includes &#8220;pharmaceuticals,&#8221; and sells drugs to patients with approval from a pharmacist.
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Amazon often tests new product lines in non-U.S. markets, before it assesses whether to roll it out in the domestic market. The company tested its secret drone-delivery program in Canada, for instance.
In the United States alone, more than 4 billion prescriptions are ordered every year. In 2015, patients, insurance companies and other payers spent an estimated $300 billion on prescription drugs.
For Amazon, it&#8217;s a lucrative market that would require navigating a variety of existing players. For consumers with a high dollar deductible, Amazon could someday be a go-to destination to shop for drugs.
&#8220;I think Amazon would introduce a lot of transparency to what drugs really cost,&#8221; said Stephen Buck, a health entrepreneur and co-founder of <a class="inline_asset" title="https://www.goodrx.com/" href="https://www.goodrx.com/" target="_self">GoodRx</a>, a service that promises to save consumers on the price of prescription meds. Buck sees a slew of potential opportunities for Amazon, including a product that competes with pharmacy benefits management or PBM giants, like <a class="inline_quotes" href="http://data.cnbc.com/quotes/ESRX" target="_self" data-gdsid="16738" data-inline-quote-symbol="ESRX">Express Scripts</a> and <a class="inline_quotes" href="http://data.cnbc.com/quotes/CVS" target="_self" data-gdsid="14561" data-inline-quote-symbol="CVS">CVS Health</a>.
Buck estimates that it&#8217;s a $25 to $50 billion market opportunity for Amazon, if executed well. But the company would also face challenges entering a regulated market it. &#8220;Prescription transfer laws and e-prescribing make a little bit more difficult than putting something in a cart and checking out,&#8221; he said.
Amazon previously backed a &#8220;dotcom&#8221; darling called Drugstore.com in the late 1990s, with CEO Jeff Bezos taking on a director role. At that time, it was speculated that Amazon could carve out a huge chunk of the prescription and over-the-counter drug sales market. Drugstore.com later sold to Walgreens, which eventually shut it down.

Amazon is hiring people to break into the multibillion-dollar pharmacy market

<a href="http://www.cnbc.com/matt-clinch/" rel="author">Matt Clinch</a> | <a href="http://twitter.com/mattclinch81">@mattclinch81</a> 
Streaming Music
The late, great David Bowie got it spot on back in 2002. Telling the <a class="inline_asset" href="http://www.nytimes.com/2002/06/09/arts/david-bowie-21st-century-entrepreneur.html" target="_self">New York Times</a> that music is going to become like &#8220;running water or electricity,&#8221; the &#8220;Starman&#8221; singer predicted the meteoric rise of the streaming subscription that last week confirmed its place in the upper echelons of the industry.
The fragile U.S. music industry saw retail revenues from recorded music grow 11.4 percent in 2016 to $7.7 billion, according to the Recording Industry Association of America (RIAA). This was thanks, in no small part, to a doubling of paid streaming music subscriptions which helped the American music business experience its biggest gain since 1998.
&#8220;For the first time ever, streaming music platforms generated the majority of the U.S. music industry&#8217;s revenues &#8230; Streaming grew from just 9 percent of the market in 2011 to 51 percent of total industry revenues in 2016.&#8221; The RIAA confirmed, namechecking such services as Spotify, TIDAL and <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a> Music.
It&#8217;s an impressive rise but the new technology has yet to truly capture any of my cash. I&#8217;ve dabbled in the &#8220;freemium&#8221; models for some services and I&#8217;ve purchased a few weeks&#8217; worth of access to one particular streaming subscription. But that&#8217;s it. I&#8217;ve so far resisted, clinging on desperately to my vinyl collection and any CDs I still have from the 1990s that aren&#8217;t scratched beyond playability. That is, until now.
With the upcoming launch of <a class="inline_quotes" href="http://data.cnbc.com/quotes/GOOGL" target="_self" data-gdsid="19004" data-inline-quote-symbol="GOOGL">Google</a> Home in the U.K. and the advertising onslaught that <a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a> is currently undertaking with its own smart assistant Alexa, it won&#8217;t be long before there&#8217;s a talking robot nestled between the books on my dining room shelf.
And there lies the major selling point for me. Call me lazy, but who wouldn&#8217;t want to shout &#8220;play Roy Orbison&#8217;s &#8216;Crying'&#8221; at a voice-controlled speaker when you&#8217;re about to embark on the chopping of an onion?
http://cnbc.africa/news/technology/2017/01/04/amazon-is-selling-tvs-that-you-can-talk-to/
The British Phonographic Industry is already notably excited at the prospect, highlighting in a report that these assistants &#8220;are likely to evolve into our de facto musical concierges around the home and in the car.&#8221;
And it&#8217;s the list of smart commands that&#8217;s a real deal breaker. Amazon&#8217;s official list of voice commands for Alexa include some very vague human interactions that are likely to get some very interesting results. Think of how much fun you could have after demanding it to &#8220;play the top rock songs from 1988?&#8221;. Or maybe even: &#8220;Play that song with the lyrics &#8220;De do do do de da da da, is all I want to say to you.&#8221;
It&#8217;ll be a party gimmick, the excitement will wear off after a few weeks &#8211; but ultimately it&#8217;s an enabler and will help me listen to even more music. Mr. Bowie would have approved.

Streaming has now taken over the music industry and A.I. will push it into the stratosphere

Amazon may be the key to disrupting the remittance industry – and they might not even know it.
Many Africans know the huge challenge of sending money back home. Have you ever tried to do it? You’ve got to fill out all sorts of forms, show your identification, get a special code, get that to those you are wanting to send the money to, or get your bank to help you, and so on. Despite a few innovations here and there from the big players, no one is going far enough to really help us in this – and take advantage of what is a huge market.
Some smaller innovators are certainly trying, and there are the likes of those in the digital money space. But I wonder why, if I can easily send money to others locally via an Electronic Funds Transfer (EFT), is it so hard to do it over our borders?
The answer is, of course, Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations, which are all aimed at impeding money laundering, terrorist funding, and who knows what else. However, these implementations have created more friction in the process of sending money back home to loved ones.
Here’s the real issue, though. We’re all assuming that you have to send money. But this isn’t right. When I send money to family in another country, it’s because I want them to use it for something. Maybe I’m helping them pay the rent or buy their groceries, maybe I’m buying them a gift or a book. Maybe I’m wanting it to go to textbooks for my younger brother. This is what remittance hasn’t figured out.
However, Amazon has.
There’s no doubt that this company has disrupted the way we purchase online, and the way we think of buying online. Every African with a phone or computer and internet coverage has access to Amazon. What is brilliant about Amazon is that whilst it has a consistent global approach, it does make local and relevant content available, especially to those countries it has offices in. Think about this: if I want to give my book, Disrupting Africa: The Rise and Rise of African Innovation to someone in the Gambia, I don’t need to send them money to go to a book store and try to find it. I don’t even need to buy a book from my stock and send it to them. All I actually need to do is hop onto Amazon and buy it there and put their address in. I can even track it on the way.
This kind of thinking can work for anything and everything, really. Amazon began to move into the grocery space just last year, with their first store expected to open in Seattle this year. Think about what it would mean if you could order groceries on Amazon and have it delivered anywhere in the world.
And it’s not like they can’t do it. Amazon have, in effect, figured out how to conduct remittance without having the onerous regulatory requirements. It’s actually very clever how they have implemented it. They have delegated all the regulation requirements like KYC and AML to the banks, who must report to the reserve banks on who is buying what where, while they themselves just focus on providing a good service.
Amazon has removed the friction in remittance. To buy on Amazon is a simple one-click process. I don’t need any supporting docs, FICA requirements, ID, or anything tedious. I know I can click and it’ll be delivered. In theory, if an individual can buy textbooks for his/her nephew in another country via an online or digital portal and the book is delivered to the home, that presents a whole new channel for the remittance market.
Some players have realised this and have created businesses to provide this sort of remittance. However, I don’t believe we’re thinking hard enough about the sort of disruption the likes of Amazon can cause in Africa. When the big boys come to town, what do we do? See, innovators can provide solutions, but on their own they simply cannot compete with Silicon Valley. Those who can compete, in my opinion, are actually the existing players.
For example, current Money Transfer Operators, such Western Union, a pseudo-African company based on their longevity on the continent, are poised to challenge this disruption. Their presence gives them a huge advantage and experience with how Africa works. They have started to move into the digital space (they must, otherwise their business will be cannibalised by Silicon Valley).
The pan African banks are also well-suited for this. Nothing stops them, technologically speaking, from sending money from one Bank account to another across borders. They already have KYC regulations and have everything required to do it.
In order to disrupt the remittance industry, these incumbent players have to either re-invent themselves or, in my view, partner with innovators. They need to think like innovators. The reality is, if the present players don’t, it’s inevitable that Silicon Valley will simply take things over. Again, consider how Amazon could sweep the current remittance players from under the carpet – simply through their already-built innovations, established name-brand, and frictionless user experience. Wouldn’t you use them if they started playing in this space in this way?
When they come – and they will – will we be ready for them?﻿

What sort of remittance disruption can Amazon cause in Africa?

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<a href="http://data.cnbc.com/quotes/AMZN" target="_blank" class="inline_quotes" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a> is making a big play for your TV set.
The U.S. e-commerce giant currently sells the Fire TV stick, which plugs into a TV and allows users to access a variety of streaming services such as Amazon Prime Video and Netflix. But now Amazon has integrated its Fire TV software directly into TV sets made by Chinese electronics giant Tongfang.
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That means people purchasing Seiki, Westinghouse and Element Electronics 4K smart TVs will be able to access loads of streaming services, channels, apps and live broadcasts directly from the set.
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<div class="attribution">And the TVs will come with a voice-control remote that features Alexa – Amazon&#8217;s artificial intelligence personal assistant, similar to Apple&#8217;s Siri or Google Assistant. Users, for example, will be able to ask Alexa via the TV set to control lights in their home.</div>
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For consumers, the Fire TV software will allow them to access all of their streaming services and many apps, including Amazon&#8217;s own, from their TVs in their living room and bedrooms. Also, Amazon hosts 4K content, which will allow consumers to consume this high-resolution programming on their new TVs.
And for Amazon, this is a further push into consumers&#8217; lives and homes. By integrating its Fire TV software on sets, it gives another way for Prime users to access the services that they pay for as part of the $99 per year subscription.
Amazon has also integrated Alexa as part of this as it looks to increase the uptake of its voice assistant and make it a key part of the home. Amazon currently sells the Echo – a speaker with Alexa built in – and expanded it into the U.K. and Germany last year. The U.S. technology firm has looked to put Alexa on a number of devices, even ones it doesn&#8217;t make. It wants to make the use of Alexa wide-spread to drive consumers to its services.
The deal with Tongfang could also lay the groundwork for Amazon to seek partnerships with other TV manufacturers. And the move also poses a challenge to rivals such as <a href="http://data.cnbc.com/quotes/AAPL" target="_blank" class="inline_quotes" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a> which has its own box that can plugged into TV sets.
Amazon and Tongfang did not reveal the financial terms of the deal or the price of the TVs, but said they would be available &#8220;later this year&#8221; on Amazon.com and authorized retailers across the U.S.﻿
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Amazon

Goldman: Follow the ‘smart money’ because the stocks most loved by pro investors are crushing the market

Amazon poised to disrupt pharmaceuticals

Amazon is hiring people to break into the multibillion-dollar pharmacy market

Streaming has now taken over the music industry and A.I. will push it into the stratosphere

What sort of remittance disruption can Amazon cause in Africa?

Amazon is selling TVs that you can talk to

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Amazon

Goldman: Follow the ‘smart money’ because the stocks most loved by pro investors are crushing the market

Amazon poised to disrupt pharmaceuticals

Amazon is hiring people to break into the multibillion-dollar pharmacy market

Streaming has now taken over the music industry and A.I. will push it into the stratosphere

What sort of remittance disruption can Amazon cause in Africa?

Amazon is selling TVs that you can talk to

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