Hedge funds shed risk in tech megacap sell-off, Goldman says

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July 17, 2024 5:31 PM EDT

FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this November 7, 2016 picture illustration. Picture taken November 7. REUTERS/Dado Ruvic/Illustration/File Photo

By Carolina Mandl

NEW YORK (Reuters) - Global hedge funds have been reducing their exposure to U.S. stocks for five days in a row amid a market-wide pullback in megacap tech-related stocks, Goldman Sachs said in a note on Wednesday.

The value of stocks hedge funds ditched over the last five trading sessions was the biggest since November 2022 and is close to a five-year record, Goldman said, without providing figures.

Hedge funds sold U.S. tech stocks in seven of the last eight trading sessions, it noted.

On Wednesday, the tech sell-off dragged the Nasdaq Composite down 2.77% and the S&P 500 fell 1.39%. The Dow Jones Industrial Average rose 0.59%.

One of the biggest global providers of equities trading and financing for hedge funds, Goldman Sachs tracks its clients' portfolios to analyze trends.

The de-risking has been led by the information technology sector, followed by industrial, healthcare, consumer discretionary and communications services, Goldman said.

Morgan Stanley, which also runs a major prime brokerage, said late last week that hedge funds' exposure to U.S. software stocks had reached "new multi-year lows."

(Reporting by Carolina Mandl in New York; Editing by Richard Chang)


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