George Soros slashes exposure to US equities

Date: Wednesday, August 18, 2010
Author: James Quinn, Telegraph

George Soros has slashed the amount of money he is willing to gamble on the fortunes of the US stock market in the second quarter as market volatility increased.

The legendary investor's Soros Fund Management – which has approximately $25bn (£16bn) under management – reduced its equity investments by 42pc to $5.1bn by the end of June, down from $8.8bn at the end of March.

The asset allocation decisions were made during a period in which the Standard & Poor's 500 index – the broadest US equity index – fell 12pc.

The fact that Mr Soros – best known as the man reputed to have made $1bn by "breaking the Bank of England" during the 1992 fiscal crisis – has decided to make such a concerted shift out of equities will send a clear message to other investors.

Gone are Soros's investments in Petrobras, Brazil's oil giant, with investments in bellwether stocks such as Wal-Mart, JP Morgan Chase and Pfizer drastically reduced, cut by 99pc, 97pc and 95pc respectively.

Of those equities that do remain, the fund's holding in a gold exchange traded fund constitutes his largest investment, some 13pc of the equity portfolio, worth $638m.

Although neither Mr Soros of his fund typically do not explain their quarterly investment decisions, it is likely some of the money has been shifted into government bonds, as well as investing in commodities and other safe havens.

The quarterly report – filed with the US Securities and Exchange Commission – details investments only in US-traded shares and related derivatives, and the fund does not have to detail overseas shares or cash or commodities held.

A spokesman for Mr Soros did not comment.