By Nell Mackenzie

September 16, 202412:13 AM PDT

LONDON, Sept 16 (Reuters) – Banks, insurance and trading firms returned to favour as hedge funds last week snapped up these company stocks at the fastest pace since June 2023, a Goldman Sachs (GS.N), opens new tab note showed.

After holding a net sold position in seven of the last eight weeks, financial sector stocks were the most sought after on Goldman Sachs’ prime brokerage trading desk, which lends to hedge funds and tracks their trades, the note released on Friday and seen by Reuters on Monday showed.

Advertisement · Scroll to continueReport this ad

These bets comprised almost entirely long positions, it said.

A short position bets that an asset price will decline in value, and a long position expects it to rise.

Europe’s STOXX 600 banking index (.SX7P), opens new tab rose by about 1.9% during the week to last Friday, while the Dow Jones banking index (.DJUSBK), opens new tab closed down 1.6% for the week.

The hedge fund buying was concentrated in North America and Europe, the note said.

Advertisement · Scroll to continueReport this ad

Hedge funds took long positions in banks, insurance and capital markets companies that facilitate trades.

On the flip side, they moderately sold consumer finance companies and mortgage trust firms, Goldman said.

Overall, hedge funds finished the week with more sell positions in stock markets, the note added.

They sold global equities for the ninth straight week and at the quickest pace in five months, it said.

https://imasdk.googleapis.com/js/core/bridge3.666.0_en.html#goog_569979942

https://imasdk.googleapis.com/js/core/bridge3.666.0_en.html#goog_569979943

https://imasdk.googleapis.com/js/core/bridge3.666.0_en.html#goog_569979944

https://imasdk.googleapis.com/js/core/bridge3.666.0_en.html#goog_569979945

Stockpicking hedge funds posted a 0.42% weekly performance gain driven in part by the general rise in equity markets, the bank said.

The S&P 500 index (.SPX), opens new tab rose just over 4% last week, while the broadest European stock index (.STOXX), opens new tab rose 1.85%.

Systematic stock traders saw a negative -0.18% for the week to Sept. 13, the note said.

Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.

Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.