A $3 Billion Fund Just Bought FUTU Stock. Here’s Why.

This morning, shares of Futu Holdings (NASDAQ:FUTU) stock are flying higher by over 6% on the heels of a positive development between U.S. and Chinese regulators. Specifically, the China Securities Regulatory Commission stated it has begun “drafting a framework” that would allow Chinese companies to stay listed on U.S. exchanges.

An iPhone screen displaying the Futu Holdings logo.
Source: T. Schneider/Shutterstock

Earlier this week, FUTU stock was added to a list of companies in possible violation of the Holding Foreign Companies Accountable Act (HFCAA). Now, a $3 billion hedge fund is set to gain from a sustained positive relationship between the two world powers.

Here’s what investors should know.

Aspex Management Buys FUTU Stock

Based on a 13G filing received by the U.S. Securities and Exchange Commission (SEC) on March 25, Aspex Management now owns 24 million shares of FUTU stock. During the fourth quarter, the fund had reported holding 3.87 million shares. So, Aspex has increased its existing position by 520% since the end of Q4.

Aspex is an investment firm based in Hong Kong that primarily holds Chinese companies listed on U.S. exchanges. Other stocks in its portfolio as of Q4 include JD.com (NASDAQ:JD) and Xpeng (NYSE:XPEV). Furthermore, it last reported having $3.27 billion in assets under management (AUM).

This firm’s recent purchase seems to reflect that it believes U.S. and Chinese regulators will be able to resolve their differences. Now, with today’s announcement of a framework draft, the two countries appear to be on the right path. What’s more, the purchase may also imply that Aspex sees upward potential for FUTU stock in the coming year; the firm has an average holding period of 3.96 quarters for all of the stocks in its portfolio.

Who Else Is Betting Big on Futu?

So, with Aspex Management on board, let’s take a look at how other institutional shareholders feel about FUTU stock. According to WhaleWisdom, which tracks all 13F filers, 172 funds own the company. That marks a decrease of 33 funds from the prior quarter. Additionally, 28 funds reported initiating a new position in Futu during the quarter. Meanwhile, 59 funds completely liquidated their positions. That in mind, let’s look at the top five institutional shareholders of FUTU.

  1. Aspex Management: 24 million shares.
  2. Capital Research Global Investors: 6.36 million shares.
  3. Tiger Global Management: 4.18 million shares.
  4. BlackRock (NYSE:BLK): 2.37 million shares.
  5. Two Sigma Investments: 1.28 million shares.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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