Wednesday, 23 July 2014
Last updated 13 min ago
Jun 3 2008 | 2:00am ET
Hedge funds were net sellers of financial stocks in the first quarter after gobbling up sector assets in the preceding two quarters.
According to a Goldman Sachs analysis of 755 hedge funds, with $833 billion of long equity positions, hedge funds now appear net short financials compared with 14% net long at year-end and 26% at the end of the third quarter. Long holdings in financials fell by $20 billion in the first quarter, and hedge fund short positions rose by an estimated $7 billion, suggesting funds were 9% net short the sector. Financials rallied 7% in April but the number of shares shorted was flat.
In addition, equity long/short funds represent the largest category of the hedge fund universe, with 34% of long equity assets, or $283 billion of the $833 of total long equity assets, and performed worst last quarter, losing 4.1% because of their overweight in the information technology space. Energy positions helped global macro funds to post highest returns.
On the flip side, global macro funds, which account for 2% of hedge fund long equity assets, were mostly tilted toward energy and financial names and posted the strongest returns of any hedge fund strategy gaining 6.9% during the quarter.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…