The hedge fund read out in a quarter: everyone is throwing software, buying chips
THE NET LEVERAGE OF HEDGE FUNDS SOARED TO 85 PERCENT IN FIVE YEARS, WHILE THE MUTUAL FUND WAS INVERSELY HOARDING CASH; THE SEVEN GIANTS WERE ALL HEDGE FUNDS, THE VIP LIST, AND WERE COLLECTIVELY UNDERRATED BY THE MUTUAL FUND。
Original title: One quarter reading of hedge funds: everyone is throwing software, buying chips
Original by Jo Wing, seen on Wall Street
The US hedge funds and large mutual funds have reached a rare consensus in one quarter: the sale of software, the influx of semiconductors, and the multi-heading of semiconductors to new heights in history。
According to Goldman Sachs' most recent report " Monitoring of hedge fund trends " and " Common fund fundamentals " , the analysis covered only hedge funds (total stock holding of $4.6 trillion) and 509 large active mutual funds (equity asset size of $3.9 trillion)。
The report shows that hedge funds have had 7 per cent returns since this year, while only 30 per cent of large mutual funds have run a winning benchmark, below the historical average of 37 per cent since 2007。
THE UNITED STATES 13F HOLDOUT DATA REVEAL A CLEAR MARKET CONSENSUS THAT HEDGE FUNDS AND MUTUAL FUNDS ARE SIMULTANEOUSLY SELLING SOFTWARE UNITS AND POURING INTO SEMICONDUCTOR PLATES, A WHEEL THAT HAS PUT THE WEIGHT OF SEMICONDUCTORS IN MULTIPLE HEDGE FUND PORTFOLIOS TO A RECORD LEVEL。
In the warehouse structure, hedge fund net leverage has recovered to the 85th percentile in the last five years, almost a year's high; at the same time, the average vacancy rate for standard 500 component shares has risen to 3 per cent of market value, the highest level since 2011, indicating a simultaneous warming of the market's many empty games。
Semiconductor silos are record, software is systematically reduced
Structural rotation within the technology plate was the most prominent theme of the season。
Goldman Sachs data show that the weight of semiconductors in hedge fund portfolios has risen to its highest level since recorded, while the weight of software has fallen to its lowest level since 2019. With respect to the Common Fund, the software holdout has fallen to its lowest level since 2012, and after the removal of Microsoft, the Fund ' s excess of semiconductor relative software has also been the largest since 2012。
AT THE EQUITY LEVEL, MICROSOFT (MSFT) BECAME ONE OF THE LARGEST NET DECREASES IN HEDGE FUNDS AND MUTUAL FUNDS IN THE LAST QUARTER. THE COMMON FUND HAS ALSO COMPLETELY REDUCED ITS HOLD ON THE REMAINING MEMBERS OF THE SEVEN. WHILE HEDGE FUNDS HAVE BEEN REDUCED FOR MOST OF THE "SEVEN GIANTS", NET GAINS HAVE BEEN ACHIEVED FOR META AND AAPL。
FOR THE SEMICONDUCTOR UNITS, THE HEDGE FUND NETTED LRCX, AMAT AND ASML; FOR THE COMMON FUND NET, INTC AND SITM。
Leverage and cash: hedge funds radical, common funds conservative
In the face of a quarter of heightened geopolitical tensions, the response strategies of the two types of institutions have become significantly different。
While hedge funds initially reduced their net leverage, net openings rose to a high level in almost a year as the market rebounded rapidly in the second quarter, and overall leverage remained high relative to historical levels。
The Common Fund chose to increase its cash allocation from an historical low of 1.1 per cent at the beginning of 2026 to 1.4 per cent at the beginning of April。
Nevertheless, this level remains extremely low relative to history, indicating that the Common Fund as a whole has not significantly withdrawn from equity markets。
Script consensus and disagreement: industrial matchmaking, technology fragmentation
There is a high level of consensus on the configuration of the blocks, with notable exceptions. Both hedge funds and mutual funds overlay industrial blocks and low-cost information technology blocks, but the reverse direction was reversed。
The hedge fund increased the net information technology tilt by 853 basis points in one quarter, representing the largest single-season change since the plate was recorded, while the net gradient of the industrial plate was reduced by 297 basis points。
The common fund operates in reverse, increasing industrial exposure by 24 basis points and reducing information technology by 20 basis points。
The two most divisive sectors are financial and non-essential consumer goods: mutual funds over-align but under-cooperative funds; hedge funds over non-essential consumer goods but under-council funds。
Four of our favorites have won the game this year
Goldman Sachs screened four of the "common favorite" shares that appeared on the hedge funds VIP list (GSTHVIP) and the common fund super-alignment list (GSTHMFOW): Boeing (BA), MasterCare (MA), Marville Tech (MRVL) and Visa (V). Of these, MRVL is a new member for this quarter and Citigroup (C) and Vertiv (VRT) withdraw from the list。
The four equities have had a return of 10 per cent since this year, running the winning equal weight index of 500 percentage points。
Over a longer period of time, the annualized rate of return for "common favorite" combinations has been 16 per cent since 2013, but the standard is as high as 22 per cent, with a marked high volatility. At present, the median stock in the portfolio is 34 times the market rate, which is significant compared to the 18-fold premium of the standard 500 medium stock。
IT IS WORTH NOTING THAT THE SEVEN GIANTS ARE ON THE VIP LIST OF HEDGE FUNDS, BUT AT THE SAME TIME THEY ARE UNDER-MATCHED BY THE COMMON FUND, WHICH CONTRASTS SHARPLY WITH THE ATTITUDE OF THE TWO AGENCIES ON THIS CORE ASSET。
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