Hedge funds hold record exposure to the seven biggest tech stocks by market capitalization, according to data released on Friday by Goldman Sachs, as managers resumed buying into the sector this month.
Microsoft , Apple, Alphabet, Meta, Amazon, Nvidia and Tesla saw the biggest percent of single stock exposure as of August 24, meaning the positions were trades in the individual stocks, not just in the indices like the Nasdaq.“We essentially have had two markets: the ‘Magnificent Seven’ and all the rest of equities. Hedge funds will be forced into capturing these returns regardless of analysis,” Jim Neumann, chief investment officer of Sussex Partners, said.
Goldman Sachs, which runs one of Wall Street’s largest prime brokerages, is able to track trends in flows. “The primary objective of hedge funds is to generate returns, rather than to be imaginative for the sake of diversification,” said Bruno Schneller, a managing director at INVICO Asset Management.Daniel Loeb, who runs Third Point - which had around $12.6 billion in assets under management at end-February - said earlier in August that his top five winners in 2023 had included Microsoft, Amazon and Alphabet.