Digital Assets Report


Like this article?

Sign up to our free newsletter

Managed futures’ low equity futures exposure highlights industry’s bearish stance

Related Topics

Managed futures strategies, which are the most active trader of S&P 500 futures, now have the lowest exposure to the index since June 2017, underlining the hedge fund industry’s strong bearish stance towards equity markets, according to a report by Institutional Investor.

Hedge funds’ bearish outlook runs counter to the positive performance of the market in the first quarter of 2023. From January to March, the S&P 500 and Nasdaq indices were up 7%and 16.8%, respectively.

Short sellers, including hedge funds and other investors betting against the market, lost an average of 6.7% over the same period, according to data from S3 Partners.

“[Managed futures] are rarely this negatively exposed to the S&P 500,” said Jon Caplis, CEO at PivotalPath. “You would have to go back to December 2012 to find a slightly lower exposure, and back to 2004 for any sustained lower exposure.”

Overall, hedge funds’ net short position in S&P 500 futures contracts is now at the second-highest level since October 2015, according to a report from NDR, a sister company of Institutional Investor.

Like this article? Sign up to our free newsletter

Most Popular

Further Reading