So which bank is a better bet right now: Bank of America (NYSE: BAC) or Citigroup (NYSE: C)? Apparently, hedge funds collectively think Citigroup has a bit more upside at the moment.

There seems to be a reallocation under way, as evidenced in the second quarter "Smart Money" survey by Thomson Reuters, based on filings of the portfolios of 30 of the biggest fundamentals-based hedge funds.

Glenview Capital sold down some of its Bank of American position while adding to its Citi stake. Others--like Viking Global Investors, Shumway Capital and Lone Pine--sold off their stakes in Bank of America. And some funds--such as Pershing Square Capital and GMT Capital--bought new stakes in Citi, according to Reuters.

The big issue for some is that Bank of America is more of a pure play on the state of the U.S. economy, which is showing signs of a double dip, while Citigroup offers more exposure to the world. Bank of America runs more than 6,000 branches domestically, while Citigroup runs just 1,000. North American loans account for nearly 70 percent of Citigroup's loans but about 80 percent of Bank of America's loans. Bank of America may also be more exposed to debit card regulation. All of that said, Bank of America remains a widely owned stock.

For more:
- here's the article

Related Articles:
Axa sells Goldman Sachs, adds commercial bank exposure
Citi saves HedgeForum from "bad bank"
Bank of America settlement over Countrywide theft a wake-up call
Bank of America ramps up retirement services