Hedge funds dump tech stocks at fastest pace since 2016, bank shows

By Carolina Mandl

NEW YORK (Reuters) – Global hedge funds in June sold U.S. shares of technology, media and telecommunications (TMT) corporations on the fastest pace since 2016, mainly driven by semiconductor stocks, Goldman Sachs said in note.

The sales could indicate that portfolio managers have change into more bearish on tech stocks, after the sector’s powerful rally in the primary half of the yr, although the note doesn’t provide any reason behind the trend.

The bank, which compiles its clients’ positioning for the info, said semiconductor and software were the highest two most sold sectors in June, while hedge funds increased their allocation to tech hardware and electronic equipment.

Tech stocks led the S&P 500 index’s strong performance in the primary half of the yr, with artificial intelligence chipmaker Nvidia up 150% and generating 30% of the index’s 15% return.

Overall, Goldman Sachs said hedge funds net sold global equities for a 3rd straight month, almost entirely driven by short sellers who borrowed shares to sell on bets that the worth will decline, enabling them to purchase them back for less.

“This month’s notional net selling was the most important since June 2022,” the bank said within the note.

(Reporting by Carolina Mandl in Recent York; Editing by Richard Chang)

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