Despite the current market rebound, hedge funds continue to sell stocks at the fastest pace in more than two years, according to a report from U.S. investment bank Goldman Sachs (GS).
The latest report from Goldman states that American hedge funds are selling stocks at their fastest pace since March 2022 when Russia invaded Ukraine.
The selling of both U.S. and foreign equities continues despite global markets rebounding and rallying following the unwinding of the Japanese yen carry trade at the end of July.
The tech-heavy Nasdaq 100 index has gained 11% and the benchmark S&P 500 index has risen 8% since the overall market reached a bottom on Aug. 5.
Analysts at Goldman Sachs say that the continued selloff among hedge funds is largely being driven by short sales in the U.S.
Separate surveys of hedge fund managers have found that they largely remain skeptical about the current market rally are worried about potential headwinds, including the U.S. presidential election this November.
Among U.S.-based hedge funds, North American stocks have been the most sold in recent weeks, driven by short sales. Specifically, hedge funds continue to sell large-cap tech stocks.
However, hedge funds are also net sellers of stocks in both Asian and European markets, especially Japan and China.
In terms of what they’re buying, U.S. hedge funds have been gravitating to energy, utilities, and real estate stocks as they position themselves in high-dividend equities, said Goldman Sachs.
The stock of Goldman Sachs has risen 56% over the last 12 months and now trades at $496.46 U.S. per share.
