Hedge Funds shifted their strategies last week by grabbing up WTI crude following the previous week’s record selling.
Also Market Neutral and Equity Long/ Short funds trimmed their net long positions, while Macro hedge funds increased their long exposures to key indexes, 10-year Treasuries and the U.S. dollar
Big speculative hedge funds raise short positions
Bank of America Merrill Lynch analysts Jue Xiong and Stephen Suttmeier released the latest edition of their Hedge Fund Monitor report this morning. In equities, they found that large speculative funds upped their short exposure in the S&P 500 and Russell 2000 indexes and cut their long exposures to the NASDAQ 100.
The analysts said large speculators are “positioning for risk off,” as their net positioning as a percentage of total open interest was at the most bullish level in U.S. Treasuries. Further, they said sentiment on this same measure for the S&P 500, gold and gasoline. is close to a three-year low.
They report that Market Neutral hedge funds decreased their market exposure from 24% net long to 17% net long. They’re favoring growth stocks and have apparently switched to a positive inflationary expectation for the first time since the middle of June. (All charts/ graphs in this article are courtesy BAML.)
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