UPDATE 1-Saudi PIF invests $4.7 bln in exchange traded funds in Q2, cuts blue-chip stakes

(Adds details from the filing PIF background)

DUBAI, Aug 15 (Reuters) - Saudi Arabia’s sovereign wealth fund, has sharply cut direct stakes in some major blue-chip companies and invested nearly $4.7 billion in sector-specific exchange traded funds, according to a U.S filing on Friday.

The total value of Public Investment Fund’s (PIF) holdings in stocks and exchange-traded funds as of the end of the second quarter was $10.1 billion, slightly up from around $9.8 billion in direct stakes in blue-chip companies the fund had disclosed at the end of Q1.

PIF could not be immediately reached for comment early on Saturday.

The PIF in recent months had bulked up minority stakes in companies worldwide, taking advantage of market weakness in the wake of the novel coronavirus pandemic.

The latest filing shows PIF dissolved stakes in companies such as BP, Boeing, Facebook, Citigroup and Bank of America, while it reduced stakes in a small number of companies including Berkshire Hathaway and Cisco Systems.

The ETFs targeted by the PIF were in the real estate, materials and utilities’ sectors, the latest filing showed.

PIF had bought $7.7 billion worth of stocks in sectors such as oil, technology and banks in the first quarter.

The S&P 500 lost about a fifth of its value in the first quarter, but recovered most of it in the second quarter.

The technology-laden Nasdaq Composite index posted sharper gains in the second quarter after falling 14% in the first.

In May, Saudi Arabia’s finance minister said a total of $40 billion was transferred from central bank foreign reserves to fund investments by PIF in March and April. It was not exactly clear how that money will be used.

PIF’s strategy is two-pronged - building an international portfolio of investments and investing locally in projects that will help reduce Saudi Arabia’s reliance on oil. (Reporting by Saeed Azhar and Davide Barbuscia; additional reporting by Nishara Karuvalli in Bengalaru; editing by Grant McCool)