In the week of July 21-27, hedge funds staged their biggest sell-off of the year in technology stocks, just as the S&P 500 index hit an all-time high. According to Goldman Sachs, investors are locking in profits and reducing risk amid a revaluation of the sector. Instead of tech giants, funds are refocusing on defensive assets - companies producing everyday goods, write Reuters. 

Details

Goldman Sachs last week recorded the largest hedge fund capital outflow from the technology sector since July 2024. Hedge funds closed long positions en masse without opening short positions - and this affected all segments, from chip makers to software and IT companies. The sell-offs covered both the US and Europe.

Hedge funds exited assets amid market growth: the S&P 500 index, whose top ten companies include seven tech giants, updated its closing record five times last week. It added 28% from its April low, while the Nasdaq Composite added 38%. Amid overvaluation and volatile debt markets, investors opted to lock in profits.

Where the focus has shifted

Simultaneously with the sell-off of technology securities, hedge funds started actively buying securities of consumer sector companies - food, beverages, hygiene products;

Goldman notes that demand for defensive stocks has risen steadily for the fourth consecutive week.

Context

Just two months ago, the situation was the opposite. In May 2025, funds were buying stocks at a record pace - the fastest since November 2024, reported Goldman. 

The main focus then was on the technology sector, especially on companies related to AI and semiconductors. Markets showed strong dynamics: the S&P 500 added 6% - the best May since 1990, the Nasdaq added almost 10%, and the STOXX Europe 600 added more than 5%.

In addition to technology, funds also built up positions in Europe's consumer, financial and healthcare sectors in May - particularly in Spain, France and Germany.

This article was AI-translated and verified by a human editor

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