Morgan Stanley pointed out in a latest report that global hedge fund exposure to US software stocks hit a multi-year low last week amid widespread selling in technology stocks.
Da Mo tracks the clients of its main brokerage department to understand the liquidity of hedge funds. The bank pointed out that last week in the United States, Europe, and Asia (excluding Japan), portfolio managers were generally selling stocks.
The report states, "Among them, software stocks are the stocks with the highest net sales, which continues the net selling momentum in the field since the end of April and lowers risk exposure to a multi-year low
Last week, the S&P North American Technology Software Index fell by about 2%, but it has still risen by 8.8% so far this year. This index includes companies such as Adobe, Salesforce, Microsoft, and Oracle.
In this regard, according to the analysis of Morgan Stanley, the rise of the overall stock market, which is only driven by a small number of technology stocks, has caused some investors' concern that if the sentiment of the market changes, the rise of the stock market may turn into a foam.
Not only did Morgan Stanley warn of the current situation, but the Prime Services desk of Wall Street investment bank Goldman Sachs also pointed out that hedge funds have sold information technology and communication services stocks for the fourth consecutive week. In the past eight weeks, hedge funds have experienced net selling for seven weeks.
Goldman Sachs pointed out that in the information technology sector, almost all sub industries have experienced net sales, mainly involving software, technology hardware, and electronic devices. In the communication services sector, the net sales of interactive media and services, entertainment, and diversified telecommunications services have exceeded the net purchases of the media industry.
In addition to the technology, media, and telecommunications industries, hedge funds have also sold cyclical stocks because their volatility is consistent with the economic cycle.
Last month, Goldman Sachs also released data showing that hedge funds are selling software stocks. At that time, the bank stated that the net exposure of hedge funds to software stocks was at its lowest level in over five years.