Tech stocks lured hedge funds in August – report

The Nasdaq logo is seen in New York City’s Times Square on December 3, 2021. REUTERS/Jeanah Moon

NEW YORK, Sept 6 (Reuters) – Hedge funds returned to stocks in the technology, media and telecoms (TMT) sector in August, the most active buying since February 2021, according to a Goldman Sachs core services report.

In the so-called TMT sector, long buys outnumber short sells by a ratio of 6.5 to 1, the bank said in the note, indicating that portfolio managers are more optimistic about the sector’s valuation.

The move came before a sell-off in September on concerns about tightening monetary policy. The tech-heavy Nasdaq (.IXIC) is down roughly 1.7% so far this month.

In addition to tech stocks, hedge funds bought consumer discretionary, healthcare, real estate and financials in August, while industrials, energy and materials weighed negatively.

Despite recent additions to their portfolios, equity long-short hedge funds remain relatively risk-averse, Goldman Sachs said. Funding – long positions minus short positions – fell 0.5 percentage points to 47.5% in August, the ninth percentile over the past 12 months. This means that it is only 9% lower than last year.

Long-term hedge funds were roughly flat in August, down 0.1 percent. It decreased by 14.52% during the year.

Reporting by Carolina Mandel in New York, additional reporting by Lawrence Delevingne in Boston Editing by Matthew Lewis

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