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  • Lori Calvasina of RBC Capital Markets reveals the favorite high-growth stocks of hedge funds at the end of 2019.
  • She says the stocks the funds overweighted have beaten the rest of the market so far in 2020, as they did far better than average during the coronavirus plunge.
  • The list is heavy on technology, internet, media, and communications companies — a group that has been a Wall Street favorite for more than a decade.
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Everything has changed, and not that much has changed.

The stock market has been on one of the wildest rides in its history over the past two months, but the types of stocks that are thriving relative to their peers hasn’t shifted that dramatically. High-tech growth stocks are still in demand.

That’s according to Lori Calvasina, head of US equity strategy for RBC. She and her team dug through the holdings of 721 actively managed hedge funds at the end of the fourth quarter and revealed the names that growth funds like the best.

That would be a historical footnote except that those stocks have held up better than average this year. They outperformed substantially during the market downturn in February and March, and they’ve been broadly in-line with the rest of the market since stocks hit their low on March 23.

“The basket bounced back in the final months of 2019 and is outperforming so far in early 2020,” Calvasina wrote in a note to clients.

The result is a list of the 11 stocks listed on the Russell 1000 index that are most likely to be overweighted by growth-focused hedge funds. Given their market-beating performance throughout the coronavirus sell-off, they appear to be strong bets at the moment.

They’re listed below in increasing order of the percentage funds overweighting those stocks:

11. Zoetis

Zoetis




Markets Insider



Ticker: ZTS

Sector: Healthcare

Percentage of growth funds overweight: 43%

2020 relative return: 5.8%

Source: RBC Capital Markets

10. Nike

Nike




Markets Insider



Ticker: NKE

Sector: Consumer discretionary

Percentage of growth funds overweight: 43%

2020 relative return: -5.8%

Source: RBC Capital Markets

9. ServiceNow

ServiceNow




Markets Insider



Ticker: NOW

Sector: Information technology

Percentage of growth funds overweight: 44%

2020 relative return: 7.0%

Source: RBC Capital Markets

8. Alphabet

Alphabet




Markets Insider



Ticker: GOOGL

Sector: Communication services

Percentage of growth funds overweight: 45%

2020 relative return: -1.4%

Source: RBC Capital Markets

7. Amazon

Amazon




Markets Insider



Ticker: AMZN

Sector: Consumer discretionary

Percentage of growth funds overweight: 48%

2020 relative return: 19.1%

Source: RBC Capital Markets

6. Mastercard

Mastercar




Markets Insider



Ticker: MA

Sector: Information technology

Percentage of growth funds overweight: 51%

2020 relative return: -1.2%

Source: RBC Capital Markets

5. Facebook

Facebook




Markets Insider



Ticker: FB

Sector: Communication services

Percentage of growth funds overweight: 51%

2020 relative return: -6.1%

Source: RBC Capital Markets

4. Adobe Systems

Adobe




Markets Insider



Ticker: ADBE

Sector: Information technology

Percentage of growth funds overweight: 53%

2020 relative return: 5.2%

Source: RBC Capital Markets

3. PayPal

PayPal




Markets Insider



Ticker: PYPL

Sector: Information technology

Percentage of growth funds overweight: 56%

2020 relative return: 6.4%

Source: RBC Capital Markets

2. Salesforce

Salesforce




Markets Insider



Ticker: CRM

Sector: Information technology

Percentage of growth funds overweight: 59%

2020 relative return: 3.6%

Source: RBC Capital Markets

1. Visa

Visa




Markets Insider



Ticker: V

Sector: Information technology

Percentage of growth funds overweight: 70%

2020 relative return: 1%

Source: RBC Capital Markets

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