Exploring BlackRock's Q3 2016 vs. Q4 2016 13F Holdings

At the end of each quarter, institutional investment managers with over $100 million in assets under management are required to file a form 13F with the Securities and Exchange Commission (SEC). This form discloses their equity holdings, and it provides insight into their portfolio composition and investment strategy. BlackRock Investment Management, LLC, a global investment management firm, recently filed its 13F for Q4 2016. In this post, we'll take a closer look at how its Q4 equity holdings compare to its Q3 holdings.

First, it's worth noting that BlackRock reduced some of its major holdings in Q4. Specifically, it reduced its holdings in Facebook by 25.9%, Merck by 16.2%, and CVS by 13.1%. In contrast, BlackRock increased its holdings in JPMorgan Chase by 21.7%, Bank of America by 79.5%, and Delta Airlines by an incredible 124.9%. These changes reflect BlackRock's strategy of shifting its portfolio towards companies with strong fundamentals and attractive valuations while reducing exposure to companies with relatively weak performance.

In terms of industry allocation, BlackRock's largest holdings were in the technology, healthcare, and finance sectors. These three sectors accounted for approximately 57% of its equity holdings. BlackRock increased its exposure to the finance sector by approximately 9% in Q4, primarily through adding to its positions in JPMorgan Chase and Bank of America. Similarly, BlackRock increased its holdings in the industrial sector, which accounted for 8% of its portfolio in Q4, up from 7% in Q3.

BlackRock's largest holding in Q4 was Apple Inc., which accounted for approximately 11% of its equity holdings. BlackRock increased its holdings in Apple by approximately 1%, adding 178,439 shares. BlackRock's other top holdings in Q4 were Microsoft, JPMorgan Chase, Amazon, and Bank of America. BlackRock reduced its holdings in Amazon by 5.3% in Q4, a move that was consistent with its strategy of reducing exposure to high-growth but overpriced companies.

Overall, BlackRock's Q4 equity holdings reflect its strategy of focusing on high-quality companies with attractive valuations while reducing exposure to companies with relatively weaker fundamentals. By increasing its exposure to the finance and industrial sectors, BlackRock has positioned itself to take advantage of the potential benefits of the Trump administration's proposed policies. However, BlackRock's large exposure to the technology sector suggests that it has confidence in the long-term growth prospects of this sector. Investors and traders should keep an eye on BlackRock's future 13F filings to see whether its investment strategy continues to evolve.