Goldman Sachs: Hedge funds continue to reduce exposure to large-cap tech stocks, increasing holdings in cyclical stocks
Hedge funds have increased their financial stock exposure to the highest level since 2012, while the net exposure of utility stocks has reached the highest level since 2008
On Friday, Goldman Sachs strategist Ben Snider and others stated that hedge funds continue to reduce their exposure to large-cap tech stocks and increase their allocation to cyclical stocks, including raising their exposure to financial stocks to the highest level since 2012.
As investment in the artificial intelligence sector deepens and expands, hedge funds are also turning to utility stocks. In the second quarter, the net exposure to this type of stock reached its highest level since 2008.
Renewable energy giant NextEra Energy and Texas-based power producer Vistra are among the hedge funds' favored stocks at Goldman Sachs. According to a Wall Street News analysis, some market participants point out that stocks like Vistra, despite experiencing a surge, are still relatively cheaper compared to other AI concept stocks, leading Wall Street analysts to generally hold a positive view on them.
According to Goldman Sachs, other industries that hedge funds have increased their allocations to include: non-essential consumer goods, financials, and energy. Among financial companies, Bank of New York Mellon, Discover Financial Services, and S&P Global are listed as "rising stars."
Goldman Sachs also stated that the year-to-date return for long-biased U.S. stock hedge funds is 8%, lower than the performance of the S&P 500 index during the same period. As of Friday's U.S. market close, the year-to-date gain for the S&P 500 index is approximately 11%.
Goldman Sachs pointed out that within the past month, the negative impact of 25% short interest on overall hedge fund performance has been relatively small