A group of hedge fund favorite stocks staged a comeback in the new year with a double-digit return, according to Goldman Sachs. The Wall Street bank analyzed the holdings of 758 hedge funds with gross equity positions of $2.3 trillion at the start of 2023, based on regulatory filings. It then combines a basket of the most popular long positions, dubbed Goldman’s “Hedge Fund VIP basket,” consisting of 50 stocks that are most often seen among the 10 largest hedge fund holdings. This basket is down 32% in 2022, experiencing the second-worst annual return in its 21-year history, both in absolute terms and relative to the S&P 500, Goldman said. Growth stocks suffered from last year’s selloff amid rising interest rates. These hedge fund darlings have returned more than 10% year to date as tech stocks bounce back from steep losses, the firm said. That strength in VIP lifted the average hedge fund to 3% in early 2023, Goldman said. “While the concentration of the most popular positions in growth stocks and the Info Tech sector has been a headwind for the past two years, the tilt has been a blessing so far this year along with a clear momentum reversal,” said Ben Snider, equity strategist. at Goldman, said in a note. While basketball underperformed last year, it has a long record of beating the market. The VIP basket has outperformed the S&P 500 in 59% of quarters since 2001 with an average monthly excess of 38 basis points, Goldman said. Microsoft and Amazon remained the two most popular hedge fund positions in the last quarter. Microsoft has gained more than 5% this year, while Amazon has accumulated more than 15%. Meta rebounded to third place on the list after exiting the last five quarters for the first time since 2014. Shares of the social media giant have rebounded 23% in the new year after the company reported fourth-quarter revenue that topped estimates and announced a share buyback of $ 40 billion. Activision Blizzard also appeared on the VIP list. In January 2022, Microsoft agreed to acquire Activision for $95 per share, or about $69 billion, but the deal has since been mired in an antitrust case by US regulators trying to block the sale. Tesla, on the other hand, topped the entire list, according to Goldman. – CNBC’s Michael Bloom contributed reporting.