Hedge funds positioned for stock-picking gains, says Goldman
With market conditions for US stock-pickers becoming more favourable, hedge funds are positioning accordingly by ramping up their use of leverage as they look to reap gains from outperforming stocks, according to a report by Bloomberg.
The report cites data from Goldman Sachs Group as revealing that one particular measure of the use of leverage by funds to take stock positions is close to a record high, with analyst Ben Snider writing in a note dated 21 February that hedge funds are “well-timed to take advantage” of the improving conditions.
Snider's outlook is based on analysis of the holdings of 758 hedge funds with $2.3 trillion of gross equity positions at the start of this year.
According to Goldman, S&P 500 Index stocks that will could outperform in coming months include online streaming service Netflix Inc, gas explorer EQT Corp, and computer processor maker Advanced Micro Devices Inc.