Global Hedge Funds began to add US equity to the portfolio last week after large -sales sales in the main index of Wall Street, the initial indication of optimism about the country.
Goldman Sachs said in a separate note that after the position released in US shares on March 7 and 10, the hedging fund began to increase the largest economic exposure in the world for the remaining week until Thursday.
The bank shows a hedging fund adding long and short bets to US shares, adding a global portfolio of hedge funds to be more bearish, because the proportion of betting shares will grow relative to the long position last week. In a separate note, JPMorgan revealed the same trend.
Elsewhere, portfolio managers continue to reduce risk in Europe and Asia, Goldman added. It is said that European stocks are sold at the fastest speed in more than five years, as well as developing markets in Asia.
The question seen on Friday and Monday represents the two largest deleveraging in four years, with several activities comparable to the early days of Pandemi Covid, Reuters reported earlier.
All the main US indexes posted losses last week because investors grew alert to economic views amid uncertainty about President Donald Trump’s tariff policy.
However, they experienced a comeback on Friday, with S&P 500 SPX up 2.18%, Dow Jones Industrial Average DJI rose 1.74%and Nasdaq IXIC increased 2.68%.
The return suddenly -the hedging fund has different reasons, with some investors looking for bargaining, while also adding bets that shares will decrease further.
Protection funds that follow the trend, are also known as CTA (commodity trading advisors), are not short in US equity, according to JPMorgan.
However, Barclays said in a note on Friday that there were some signals of capitulation in the US market, which could encourage some “buying declines,” although uncertainty around the tariff policy could contain trends.
Charles Lemonides, founder of Valueworks Hedge Hedge Equities Long/Short Equities, has added a long US position to his portfolio in the middle of sales because he believes the 10% correction for Nasdaq and S&P has several opportunities.
“The market has fallen and extrapolation that it will continue to fall.
The profit of 7.68% in STOXX 600 SXXP this year, while the S&P 500 fell 4%, has narrowed the assessment gap between the US and Europe, making the shares of “old continent” not so attractive.
Anders Hall, Head of Investment at Vanderbilt University, said that hedge funds took a more careful approach because, while uncertainty about US trade policies and the potential for recession is likely to remain, Europe has its own economic and political challenges.
Europe is dealing with a re -plan driven by fears that it can no longer rely on US protection because the Russian War in Ukraine continues. Germany has announced a bonanza of defense and infrastructure shopping. This region also deals with the threat of tariffs.
“The US market, although not without risk, can be seen as a relatively safer bet by some people,” he said, adding the US market is more liquid than Europe, which can be an advantage if a hedge fund must adjust the position in the middle of an increase in volatility.
Source: Reuters
