Hedge funds stepped up their equity exposure last week at the fastest pace since November 2024, according to a report by Reuters citing note from Goldman Sachs Prime Brokerage, as global stock markets wrapped up their strongest May in decades.
Net equity buying by hedge funds was broad-based across regions, with North America and Europe leading the charge, the bank said. The data reflects a sharp resurgence in risk appetite, underpinned by optimism around artificial intelligence, resilient earnings, and a supportive macro backdrop.
The S&P 500 climbed more than 6% in May, marking its best May since 1990, while the Nasdaq gained 9.6%, its strongest monthly rally since November 2023 and best May performance since 1997. In Europe, the STOXX 600 rose over 5%, benefiting from a pick-up in investor sentiment.
Technology stocks were the standout sector, attracting the most hedge fund inflows. Goldman’s data shows hedge funds built the largest net long positions in tech in more than five years, with buying concentrated in AI-exposed sub-sectors such as semiconductors, technology hardware, and electrical equipment.
North American tech names were the most heavily accumulated, followed by select European counterparts, Goldman noted.
In Europe, hedge funds bought stocks for a third consecutive week and at the strongest pace in three months. Markets in Spain, France, Finland, Germany, Sweden, and Denmark were the most net bought, while Ireland, the Netherlands, and Switzerland saw the highest levels of net selling.
At the sector level, hedge funds rotated into consumer discretionary, financials, health care, and communications services, the bank said. Single-name stock purchases dominated flows, but managers also deployed capital into long index trades, highlighting broader confidence in equity beta.
