Systematic hedge funds bought stock at a record pace in the last five trading sessions, adding $86 billion of stock exposure, said a Goldman Sachs note published late Thursday and seen by Reuters on Friday shows.
Such hedge funds use algorithms to ride market trends until they peter out and use market signals rather than views on the economic aspects of the company stocks they trade.
World stocks held near record highs on Friday, set for their a third straight week of gains, as investors awaited a crucial weekend that could pave the way for a near-term resolution to the Middle East war.
Key points from the Goldman Sachs data:
• The last five sessions have garnered one of "the largest in history" trading demand from CTAs (Commodity Trading Advisors), or hedge funds that ride market trends.
• Since markets turned around at start of April, hedge funds -- particularly those that trade systematically -- have been equity buyers, betting that asset values would rise.
• The rate at which speculators have bought global equities over the last week is in the top five buying speeds of all time.
• Goldman Sachs calculations estimate that these speculators could continue to buy stocks and purchase an additional $70 billion of the next five sessions.
• The last time global CTAs bought stocks with this fervor was in August 2024, November 2023 and September 2019.
