Global hedge funds have been reducing their exposure to US stocks for five consecutive days amid a broad sell-off in megacap tech-related stocks, according to a report by Reuters citing a note from Goldman Sachs.
Data from the bank’s prime brokerage division reveals that the value of stocks divested by hedge funds over the past five trading sessions marks the largest sell-off since November 2022 and is nearing a five-year record, though Goldman Sachs did not provide specific figures.
Hedge funds have been net sellers of US tech stocks in seven of the last eight trading sessions, Goldman noted.
The tech sector’s decline significantly impacted market indices on Wednesday with the Nasdaq Composite dropping by 2.77%, the S&P 500 falling by 1.39%. The Dow Jones Industrial Average, meanwhile, rose by 0.59%.
Goldman Sachs, a major global provider of equities trading and financing for hedge funds, monitors its clients’ portfolios to identify trends. The recent de-risking was primarily driven by the information technology sector, followed by industrial, healthcare, consumer discretionary, and communications services sectors.
Morgan Stanley, another significant prime brokerage, reported last week that hedge funds’ exposure to US software stocks had reached “new multi-year lows.”
