Hedge funds are buying up US stocks at the fastest pace in six months - Goldman Sachs

Amid continued U.S. stock market records, hedge fund managers last week bought up U.S. stocks at the fastest pace in six months, Goldman Sachs' brokerage unit found, Bloomberg writes.

The S&P 500, Nasdaq Composite and Dow Jones all hit all-time highs at the close on Friday, June 29, and recorded their ninth straight week of gains, the longest winning streak since 2023.

Trading flows were formed by hedge fund managers opening long positions and liquidating short positions in both index and exchange-traded funds (ETFs), Goldman Sachs said in a note to clients. Moreover, short positions in U.S. ETFs declined for the second week in a row.

Such data on hedge funds' positions marks a noticeable shift compared to their more defensive position, which Goldman Sachs analysts recorded in the middle of Ma, the agency notes. At that time, experts said that hedge funds recorded profits on shares of chip manufacturers and increased short positions on macroeconomic assets - against the background of rising yields on government bonds and inflation rates in the U.S. higher than predicted.

Shares of financial companies benefited most from the rotation last week, Goldman Sachs said - they attracted the largest volume of net purchases for almost the last six months. The volume of long positions exceeded the volume of short sales by 6.5 times, and the leaders were mainly shares of payment systems and, to a lesser extent - banks, analysts calculated.

The leverage figures, Goldman Sachs observed, reflect increased risk appetite.

The growth of U.S. stocks is supported by investors' enthusiasm for investment in artificial intelligence infrastructure, as well as stronger-than-expected results of corporate reports, Bloomberg points out. Against this backdrop, Goldman Sachs said last week that the volume of hedge fund bets on the tech sector reached an all-time high - since 2016.

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