Hedge funds are divesting from technology stocks according to Goldman Sachs and instead seeking opportunities in an underappreciated sector, as per a report.
The Daily Hodl
The Shift in Hedge Fund Trading: A Move Away from Tech Stocks Towards Consumer Staples
In a surprising turn of events, the current trend in hedge fund trading in 2025 shows a significant shift away from technology stocks towards consumer staples. Hedge funds are rapidly divesting from U.S. tech stocks at the fastest 12-month rate, despite the S&P 500 hitting record highs driven largely by tech[2].
This strategic repositioning by hedge funds is in response to high valuations and persistent bond yields, leading to a reduction in exposure to semiconductors, IT services, and other tech sectors[2]. Instead, hedge funds are increasing long positions in consumer staples, focusing on sectors such as food, beverage, and personal care. This shift has made consumer staples the top net buying sector for about four consecutive weeks[2][4].
For instance, hedge funds are showing growing interest in companies like CVS Health, which is seen as a defensive play amid weak U.S. spending indicators and broader macroeconomic caution[4]. The shift towards consumer staples reflects a preference for defensive sectors as markets reach all-time highs amid economic uncertainties[2][4].
It's important to note that hedge fund assets have reached record highs in 2025, with inflows and strong performance bolstering overall capital under management[1][3]. Equity long/short strategies, which include stock-picking funds, have seen growth driven by strong returns, although some investor withdrawals occurred[1].
Despite a strong equity market, systematic quant-driven hedge funds experienced volatility but remain positive for the year[1][5]. The future path of equities may depend partly on a decline in long-term rates, but clear signals have not yet been seen. Florian Ielpo, head of macro at Lombard Odier Investment Managers, suggests that yields on long bonds may determine the next move for U.S. equities.
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Additional Context
- Every type of tech stock was sold, including semiconductor chip companies, software firms, and IT service providers.
- Goldman Sachs notes that tech stocks were sold off by hedge funds more than any other sector last week.
- The future path of equities may depend partly on a decline in long-term rates, but clear signals have not yet been seen.
- 200,000 potential victims have been identified as malware disguised as legitimate apps have cracked bank accounts.
- A man who allegedly kidnapped and tortured a victim for $100,000,000 in Bitcoin (BTC) has been released on bond.
- US equities valuations are now 30% higher than their recent decade average.
References
[1] Hedge Funds Report Record Assets as Inflows and Performance Bolster Capital (Bloomberg) [2] Hedge Funds Are Selling Tech Stocks at the Fastest Rate in a Year (Bloomberg) [3] Hedge Funds Are Shifting Capital to Consumer Staples (Bloomberg) [4] Hedge Funds Are Buying Consumer Staples as a Defensive Play (Bloomberg) [5] Volatility Hits Systematic Quant-Driven Hedge Funds Despite Strong Returns (Bloomberg)
- As hedge funds reposition their investments, they are also showing growing interest in alternative digital assets such as cryptocurrencies and altcoins, signifying a broader movement in the finance industry.
- In the world of crypto and blockchain, The Daily Hodl covers the latest news and updates on Bitcoin, Ethereum, altcoins, and other digital assets, providing valuable insights for investors and the business community.
- Amidst the shift in hedge fund trading from tech stocks to consumer staples, it remains crucial to keep an eye on emerging trends in finance and finance-adjacent sectors like cryptocurrency and blockchain, for potential investment opportunities.
