Hedge fund managers err on the side of caution due to their fear of more stock market declines | Paragon Alpha

Hedge fund managers err on the side of caution due to their fear of more stock market declines

By Matea Gucec

According to a report by The Financial Times, many US hedge fund managers appear to fear that additional market drops are imminent and as a result, they are taking a cautious approach to stock trading.

By the middle of this month, the net exposure of US funds had dropped to its lowest level since 2010, according to a note from Morgan Stanley to clients that were included in the report. Their colleagues in Europe and Asia, however, have cut back on their stock market investments to the smallest level seen in the preceding year.

Despite the fact that the S&P 500 (-18%) and the Stoxx 600 (-15%) have already seen significant declines this year, the negative positions have been embraced.

The year 2022 has been difficult for equity hedge funds so far, according to figures from Morgan Stanley, with US long-short equity funds down 14.1% on average and European funds down 8.3%.


Similar Articles:

24 Aug

By Matea Gucec

The war for talent in the Hedge Fund arena

Subscribe here: https://www.paragonalpha.com/report/the-best-in-hedge-fund-talent and receive exclusive resumes from our impressive roster of candidates. The modern hedge fund l...


07 Aug

By Matea Gucec

Bitcoin ready for bull market as it decouples from traditional assets

Pantera Capital CEO Dan Morehead shared his bullish outlook on Bitcoin (BTC), suggesting that the cryptocurrency has reached a turning point after weathering a lengthy bear market....


02 Aug

By Matea Gucec

Recruitment agencies as a key component in Hedge Fund talent management

The hedge fund industry is known for its intensity, competitiveness, and the high stakes involved. Success in this realm requires not just capital and innovative strategies but als...