The hallmark of the Seligman Tech Spectrum Master Fund has always been slow and steady —
You won’t find it among the top-performing technology, media, and telecom (TMT) funds. But unlike many of those well-known former highfliers, Seligman has never had to worry about its high-water mark, which its clients likely appreciate. After all, in 2022 when many other tech funds suffered sharp losses and the Nasdaq Composite lost roughly one-third of its value, Seligman, headed by Paul Wick, was up 1.6 percent, according to firm documents.
This year is no different.
Through the first half of the year, Seligman is up 12.34 percent after gaining 2.53 percent in June, lagging the S&P by three percentage points and the Nasdaq by six, according to the firm’s June report, obtained by Institutional Investor. Seligman’s strategy manages about $2.5 billion, with a little more than $600 million in the master fund, including domestic feeder assets, and about $612 million in the equivalent offshore fund, the report says.
Several different Seligman client reports provide an interesting snapshot of what has driven the fund’s return and where the fund stands at the year’s halfway mark. In general, Seligman’s gains in first-half 2024 were generated with just over half the overall market’s exposure.
At the end of June, Seligman’s master fund had a 55 percent net long exposure (101 percent long and 46 percent short), down slightly from 60 percent at the end of the first quarter and 75 percent at year-end 2023, according to the report. Net exposure had ranged from 40 percent to 49 percent in 2022 and the first five months of 2023, according to another Seligman document.
Seligman also runs a very diversified portfolio. At the end of June, it held 70 long positions and 74 shorts.
In June, semiconductors and semiconductor equipment stocks led the way among industry groups. Electrical equipment was the top detractor, according to the June report. Specifically, semiconductor equipment company Broadcom was the top contributor to performance and electrical equipment company Bloom Energy was the biggest drag on returns.
On the short side, biotech company Moderna added the most to performance. Electric vehicle maker Tesla was the biggest detractor. Institutional Investor previously reported that in Seligman’s November 27, 2023, client letter (obtained by II), Wick had asserted it was a good time to bet against Tesla.
“Tesla has missed numbers all year, and a stale lineup of cars looks unlikely to change things anytime soon,” the hedge fund manager wrote. “At the same time, the company’s valuation remains stratospherically high; as numbers inevitably get cut, we see [the] stock as likely to fall significantly.”
Since the end of November, shares of Tesla are up a little more than 3 percent.
Among industries, specialty retail was the top contributor to the short book last month and autos were the largest detractor.
Heading into the second half of the year, Seligman’s five largest long positions accounted for 22.5 percent of the long portfolio and 22.8 percent of total net assets.
The majority of the largest positions haven’t changed all year, including semiconductor equipment supplier Lam Research, Broadcom, Alphabet (Class A shares), and Applied Materials, another semiconductor equipment supplier. Chip giant Nvidia was the fourth-largest long position. On the short side, the top-five positions accounted for nearly 26 percent of the short portfolio and 12 percent of total net assets.