Hedge funds dump Alibaba for smaller rival
Investors are betting on JD.com's ability to offer higher quality products through its direct delivery model
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LESS than a year ago investors were scrambling to pick up shares in Alibaba Group Holding when Asia's largest e-commerce company made its record debut on the New York Stock Exchange. Now sentiment is changing as JD.com Inc, its smaller competitor, is becoming a hedge fund favourite.
Hedge funds have boosted their ownership in JD.com to 18 per cent as of the end of June from 1.2 per cent in the third quarter of last year, according to data in public filings compiled by Bloomberg. They cut holdings in Alibaba by more than a third to about 3.1 per cent during the period. American depositary receipts of JD.com have advanced 41 per cent since their listing in New York in May 2014, while Alibaba has gained 3 per cent from its September initial public offering level, after soaring as much as 75 per cent to a record in November.
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