It wasn't too long ago that American International Group (NYSE:AIG) usurped the throne from King of the hedge funds, Apple (NASDAQ:AAPL). Since then, the two stocks have been in a tussle with Google (NASDAQ:GOOGL) at the top of the mountain, but once again, AIG has come out on top.

More specifically...
Based on Goldman Sach's "50 Stocks Most Loved by Hedge-Fund Managers" list, AIG is actually tied for second with Apple, as both companies are held by 174 hedge funds in total -- and Google blows them away with 192. So why would I say AIG reigned supreme? Because if you take a closer look at hedge funds, a big divide occurs when you focus in on the companies held in the top 10 positions.

This is where AIG shines. Of the 174 funds holding AIG, 69 had the insurer in its top 10 positions as of June 30, a solid 39.7%. On the other hand, Google was a close second, with 65 funds choosing it as a top holding, but the tech giant's percentage looked weaker at 33.9%. Apple came in a full 5% lower in the third-place slot.

Does it even matter?
Hedge funds have been under-performing so far this year, according to Goldman's review. Of the 708 funds monitored by the bank, only 5% have posted results that beat the S&P 500 (SNPINDEX:^GSPC) so far this year. While the index has provided a 20% total return (including dividends), hedge funds have produced only one-fifth of those results.

Despite the under-performance of the hedge funds so far this year, investors could still do well to follow their lead with the top holdings. Hedge funds typically perform better in down markets since they hedge their positions to provide a stabler return, but this strategy can sometimes backfire in long rallies, leading to the performance issues seen this year.

Follow the leader
One money manager in particular has been touting the potential for investors in AIG's stock for quite some time. Bruce Berkowitz's Fairholme Fund has its top position in AIG, with half of its $7.7 billion in the insurer as of June 30. With AIG's continued improvements in performance, business decisions, and capital disbursements, it's clear that Berkowitz's confidence in the company has been proved warranted. AIG's year-to-date return sits at 29.25%, a big win for Berkowitz since his investment in the bank as of Dec. 31 will have netted the fund over $883 million. And that's not counting any increases since then or dividends. Not bad.

If you haven't jumped in with the insurer yet, you've missed out on some solid growth in the company's value, a key to Berkowitz's investment. But fret not, the insurer continues to trade below its second-quarter reported book value of $66.02, so yesterday's close still poses a 40% upside for new investors.