Will AMD, Micron and Alibaba Help Turn This Fund Around?
Rob Citrone is the fund manager behind the $4.12 billion Discovery Capital Management fund. In Q2 Citrone ramped up holdings in key portfolio stocks including Advanced Micro Devices, Inc (Nasdaq:AMD), Micron Technology Inc (Nasdaq:MU) and Alibaba Group Holding Ltd (NYSE:BABA).
Citrone, like other big-name fund managers including Steve Mandel and Lee Ainslie is nicknamed ‘Tiger Cub’.This is the name given to an elite group of fund managers who worked in Julian Robertson’s legendary Tiger Management fund. Citrone worked at the Tiger fund before founding Discovery in 1999. However, the fund has suffered due to his preference for macro bets and emerging markets. Indeed, the fund actually lost money in both 2014 and 2015- although the fund bounced back the following year with a 9% return in just two months. This meant that the fund recorded an 11% gain in 2016.
Nonetheless, we can see that the fund’s measured performance (19%) continues to undercut both the average hedge fund (51%) and the S&P 500 (93%). TipRanks shows that the fund has an annualized average return over the last three years of just 3.58%. Citrone, who has a $1.1 billion personal wealth, predicted that the end of 2016 would bring the biggest market correction since 2008. So far this correction has failed to materialize. The fund has also struggled this year due to a washout in its Brazilian assets- following a scandal involving Brazilian President Temer. Bloomberg has now reported that people familiar with the matter claim the fund is on track for a 12% loss this year.
Now let’s explore these three big Q2 moves:
Advanced Micro Devices, Inc.
Rob Citrone showed that he is optimistic about the outlook for AMD in Q2, increasing the fund’s AMD position by a whopping 8,176,875 shares (about 73%). The fund now owns a total of 19,491,865 AMD shares worth $243.26 million. This is almost 6% of the total portfolio- making AMD the fund’s no. 1 stock.