Hedge funds last week bought these corporate equities at the quickest rate since June 2023, putting banks, insurance, and trading firms back in demand, according to Goldman Sachs.
The report posted on Friday revealed that the most sought-after stocks on Goldman Sachs’ prime brokerage trading desk—which lends to hedge funds and tracks their trades—were financial sector companies, after holding a net sell position in seven of the previous eight weeks.
It stated that nearly all of these bets were long positions.
A long position anticipates an increase in an asset’s value, whereas a short position wagers on a drop.
While the Dow Jones banking index concluded the week down 1.6%, the European STOXX 600 banking index increased by roughly 1.9% through last Friday.
According to the memo, North America and Europe accounted for the majority of the purchases made by hedge funds.
Hedge funds acquired long holdings in capital markets firms that enable transactions, banks, and insurance.
Conversely, they liquidated mortgage trust companies and consumer finance companies moderately, according to Goldman.
The letter also stated that hedge funds had larger sell positions in the stock market at the end of the week.
Laptops 1000According to it, they sold international stocks for the ninth straight week at the fastest rate in the previous five months.
According to the bank, the overall increase in equity markets contributed to the 0.42% weekly performance gain that stock-picking hedge funds reported.
The broadest European market index increased 1.85% last week, while the S&P 500 index rose above 4%.
The letter stated that for the week ending September 13, systematic stock traders saw a negative -0.18%.