Global hedge funds topped their bearish positions in US financial stocks to the highest level seen in nearly five years last week, according to a report by Reuters citing data from Goldman Sachs prime brokerage division.
In a note issued on Friday, Goldman’s Prime insights & Analytics team wrote: “Financials was the most net sold sector on the US prime book this week and saw the largest net selling in seven weeks, driven entirely by short sales.”
Goldman didn’t provide any insight into the possible reasons for the increases but did highlight that the ratio between long and short positions is now at a historical low, below 1.7 times. At the beginning of this year, the long/short ratio was at 2.6 times, sharply declining in March in the wake of the regional banking crisis.
Overall, hedge funds are underweight financials, at the lowest level since May 2020, Goldman Sachs said.
