Carnage in Crowded Hedge Fund Stocks May Mean Some Don't Survive
- Favorite stock bets suddenly go awry amid violent reversals
- Most-shorted shares backfire, rallying 13% over six days
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Equity hedge funds are paying dearly for their devotion to industries like software and distaste for energy and commodity stocks. Wrong-way moves in positions they’ve crowded into, both long and short, could raise survival risk for some managers, one firm says.
“This unexpected, profit-sapping dislocation has definitely hurt the majority of clients,” said Mark Connors, global head of risk advisory at Credit Suisse. “Some managers may not make it through the month.”