With appetite for equities subsiding last week after a 20% rally this year on the back of investor excitement over artificial intelligence, hedge funds are ramping up their bets against stocks, according to a report by Bloomberg.
The report cites data from Goldman Sachs' prime brokerage division as revealing that net leverage — a gauge of risk appetite that measures long versus short positions — fell by 4.2 percentage points to 50.1%, the biggest week-on-week decline in portfolio leverage since the depths of the pandemic bear market.
Data from JPMorgan Chase & Co also reveals that hedge funds tracked by the firm have upped their short selling, while Morgan Stanley’s clients cut their net leverage at a pace not seen since last October.
Stocks swung between gains and losses on Monday after the S&P 500 saw its worst weekly slide since the banking turmoil in March last week, falling almost almost 6% from its 2023 high in late July. The benchmark index is now hovering near a three-month low, according to a Bloomberg.
Yen carry trade risks mount
Hedge funds and other leveraged investors face renewed risks from the yen carry trade as Japan moves further away from decades of…
More
Valour launches first crypto hedge fund using Neuronomics AI strategy
Valour, the digital asset investment products subsidiary of DeFi Technologies, has launched its first hedge fund as it expands beyond…
More
SocGen targets strong prime brokerage growth
Societe Generale is planning to significantly expand its prime brokerage business as part of Chief Executive Officer Slawomir Krupa's…
More