Tags: hedge | funds | stocks | long

Hedge Funds Increase Exposure to Stocks

By    |   Monday, 14 July 2014 11:47 AM

While some investors have been scared away by the stock market's continuous climb to record highs in recent weeks, hedge funds apparently aren't among them.

Hedge funds that deploy a "market neutral" strategy, meaning they typically hold equal amounts of long and short stock positions, were 18 percent net long as of July 2, according to Bank of America Merrill Lynch, CNBC reports. That compares with 10 percent net long two weeks earlier.

The funds are emphasizing growth and small-cap stocks in their long exposure.

Editor’s Note:
Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now


Macro funds, which bet on macroeconomic trends through all kinds of asset classes, also have raised their long exposure to stocks in the S&P 500 and Nasdaq Composite indexes, according to the report.

The Standard & Poor's 500 index rose 9.53 points, or 0.5 percent, to 1,977.10. The index is down 0.4 percent from its most recent all-time high of 1,985.44 set July 3.

The index had a trailing price-earnings ratio of 19.1 Friday, compared to 18.4 a year ago, according to Birinyi Associates.

The near-term path of stocks will likely be determined by second-quarter earnings reports, which began coming out last week.

"Stocks have advanced so much . . . that we now need to see earnings growth catch up with that," Jim McDonald, chief investment strategist at Northern Trust, which has $915 billion in assets under management, tells The Wall Street Journal.

"We think that will come through."

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

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While some investors have been scared away by the stock market's continuous climb to record highs in recent weeks, hedge funds apparently aren't among them.
hedge, funds, stocks, long
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2014-47-14
Monday, 14 July 2014 11:47 AM
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