Hedge funds are holding back on equity exposure despite global stock markets hitting record highs, according to a report by Bloomberg citing a note by strategists at JPMorgan Chase & Co which highlights that macro hedge funds remain cautiously positioned, with their equity beta modestly negative.
While slightly less defensive than in previous months, these funds are still restrained even as economic data remains resilient, recession fears fade, and the Federal Reserve adopts a more dovish stance.
JPMorgan also noted that speculative positioning in US equity futures is near its long-run median, down from elevated levels in 2024 and early 2025. Short interest in the Nasdaq 100 ETF (QQQ) remains low, while S&P 500 ETF (SPY) short positions have only partially unwound, signalling some ongoing caution among investors.
“Speculative investors’ exposure to US equities is not particularly elevated and in principle has room to rise,” the strategists wrote, suggesting that hedge funds could increase risk-taking if market momentum continues.
