Hedge funds return to equities as risk appetite rebounds
TOP STORY: Hedge funds are rebuilding equity exposure after sharply reducing risk in late July, with investors once again adding to long positions as the latest market rally gains momentum, according to a report by the Wall Street Journal citing a note from the prime brokerage division at Goldman Sachs.
Hedge funds are once again increasing their exposure to equities, according to a report from the Wall Street Journal citing Goldman Sachs. The latest market rally has reignited investor appetite for long positions, with global equities being net purchased by hedge funds for two consecutive weeks. Gross trading activity has reached its highest level in seven weeks, with long purchases exceeding short sales by a ratio of 1.4 to one.
This marks a significant shift from late July, when hedge funds were cutting equity exposure and selling long positions amid a selloff in artificial intelligence-related stocks. The defensive positioning has seemingly run its course, as hedge funds are now net buyers of individual stocks for the first time in about a month, with materials stocks attracting the largest net buying activity.
This turnaround highlights how swiftly hedge fund positioning can change when market volatility eases, potentially bolstering the broader equity rebound.
Written by urgent.news from Hedgeweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
