Saudi Arabias $300 billion wealth fund ditched Facebook, Disney, and Boeing stocks, and poured billions into ETFs in the second quarter

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• Saudi Arabia’s sovereign wealth fund, which is among the largest in the world, released investments it bought and sold in the second quarter in an SEC filing.
• The state-backed Public Investment Fund exited its investments in major US corporates such as Boeing, Facebook, Marriott, and Disney, according to the filing.
• The wealth fund focused on exchange-traded funds rather than individual investments and invested nearly $4.7 billion on the real-estate and utilities sectors.
• PIF also sold off 50% of its shares in Warren Buffett’s Berkshire Hathaway.
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Saudi Arabia’s sovereign wealth-fund ditched its shares in some of the world’s biggest companies to focus more on exchange-traded funds in the second quarter of the year, according to a Securities and Exchange Commission filing. 

The composition of the wealth fund had significantly changed from the first quarter, seeing a higher concentration in ETFs, which are a low-cost basket of stocks and other securities that increase diversification. It bought real-estate and  utility-focused ETFs in the quarter, a 13F filing showed.

The kingdom’s Public Investment Fund, which has total assets of about $300 billion, invested $4.65 billion in US-domiciled ETFs, the filing showed.

The fund invested $1.86 billion into The Utilities Select Sector SPDR Fund, and $2.79 billion into The Real Estate Select Sector SPDR Fund, the filing said.

PIF’s holdings in US ETFs and equities totalled just above $10 billion, up from about $8.76 billion by the end of the first quarter this year.

The wealth fund dumped its individual stakes worth over half a billion dollars in major multinational companies like Boeing, Facebook, Marriott International, and Walt Disney. 

It also sold off some 50%, or 210,222 shares, in Warren Buffett’s Berkshire Hathaway.

Its stake in Facebook was worth in excess of $520 million, while its Disney stake was worth around $495 million, the SEC filing showed.

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PIF had plowed billions of dollars into these big US corporates in the first quarter with an aim to diversify its economy away from oil, a move meant to capitalize on the coronavirus sell-off to purchase the stocks at bargain prices. 

The SEC filing showed that PIF had also unloaded its positions in American banks Citigroup and Bank of America, and European energy firms Shell, BP, and Total. 

The fund boosted its shares in cruise operator Carnival and events promoter Live Nation Entertainment. 

Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia, has been calling the shots on the economy’s plan to shed its image of the kingdom’s “addiction” to oil. Previously, PIF has bought stakes in Uber, Tesla, and Softbank’s Vision Fund to expand its global portfolio.

Oil revenues made up 77% of the country’s total revenue, but the kingdom’s crude exports plunged by $12 billion in a single month this year as record low prices hurt revenues.

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