LONDON – Banks, insurance and trading firms returned to favor as hedge funds snapped up these company stocks last week at the fastest pace since June 2023, a Goldman Sachs note showed.
After holding a net sold position in seven of the last eight weeks, financial sector stocks were the most sought after on Goldman Sachs’ prime brokerage trading desk, which lends to hedge funds and tracks their trades, the note released on Friday and seen by Reuters on Monday showed.
These bets comprised almost entirely long positions, it said.
A short position bets that an asset price will decline in value, and a long position expects it to rise.
Europe’s STOXX 600 banking index rose by about 1.9% during the week to last Friday, while the Dow Jones banking index closed down 1.6% for the week.
The hedge fund buying was concentrated in North America and Europe, the note said.
Hedge funds took long positions in banks, insurance, and capital markets companies that facilitate trades.
On the flip side, Goldman said they moderately sold consumer finance companies and mortgage trust firms.
Overall, hedge funds finished the week with more sell positions in stock markets, the note added.
They sold global equities for the ninth straight week and at the quickest pace in five months, it said.
Stockpicking hedge funds posted a 0.42% weekly performance gain driven in part by the general rise in equity markets, the bank said.
The S&P 500 index rose just over 4% last week, while the broadest European stock index rose 1.85%.
Systematic stock traders saw a negative -0.18% for the week to September 13, the note said.
(Source: Reuters)
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
