Hedge Funds Hold Up in Rout as Defensive Stance Finally Pays Off
- Money managers have reduced tech stocks, raised bearish bets
- Most-shorted stocks handing bears the best month since 2016
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Throughout the bull market, through years of subpar returns, the hedge fund refrain has been the same: wait till the market turns. Now it’s turning and at least some of the claims are bearing out.
While a week and a half doesn’t prove much, thanks to defensive positioning and increased bearish bets against stocks, long-short hedge funds tracked by Credit Suisse declined about 3 percent in October through midday Thursday. While some clients would probably prefer no loss at all, that’s only half the retreat in the S&P 500.