UBS: Hedge Funds Back To Buying Stock

Mar 20 2009 | 2:03am ET

It’s been a long time coming, but hedge funds are betting on stocks once more.

For the first time since October, U.S. hedge funds clients of UBS were net purchasers of equities, according to a report from the bank’s chief equity strategist, David Bianco. In the four weeks through March 13, hedge funds averaged $140 million in net purchases of stock.

The most popular sectors for the new stock inflows were healthcare, consumer and industrial companies. Hedge funds have still not sweetened on financials or energy companies.

The move back into stocks comes as the Standard & Poor’s 500 Index, which hit a 12-year-low on March 9, began something of a rebound. As usual, hedge funds are somewhat ahead of the curve—if, indeed, the market rebound is for real—as most other investors remained net sellers of stock, according to UBS.

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