By region, hedge funds switched to net purchase of U.S. stocks for the first time in seven months, Goldman Sachs said, spurred by extended wagers on semiconductor-related equities driven by the artificial intelligence (AI) boom.
Yet, the inflow into the “Magnificent 7”, the largest U.S. companies by market value, such as Apple AAPL.O and Nvidia NVDA.O, “collectively is little changed so far this year,” the bank said, adding that fund managers preferred smaller tech companies.
Interest in Asia is also recovering, led by Japan. Japan recorded the largest hedge fund net buying in eight months as the Nikkei .N225 soared to all-time-highs, according to Goldman Sachs.
Japanese stocks have soared through 2023 as the world’s fourth-largest economy shows signs of emerging from deflation and companies take steps to improve governance.
Net allocation to Japanese stocks returned to above 5-year averages “but remains well below historical peak levels,” Goldman Sachs said, suggesting more room for the market rally.
Meanwhile, Chinese equities also attracted net buying for a third straight month while net allocation to Europe and emerging markets ex-China rose to about 5-year highs, Goldman Sachs said.
(Reporting by Summer Zhen; Editing by Jacqueline Wong)
((summer.zhen@thomsonreuters.com; 852-3462-7739;))
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