Mutual fund performance has weakened YTD, hedge funds remain solid: Goldman Sachs
Mutual fund performance has declined over the year, while hedge funds have continued to perform well, Goldman Sachs revealed in a recent report.
According to estimates from Goldman Sachs Prime Services, US equity fundamental long/short hedge funds have posted returns of +9% year-to-date, driven by successful bets on favored long positions and targeted short positions.Goldman notes that mutual fund cash balances have dropped to a record low of 1.4% of total assets, as funds aim to reduce the impact of holding cash in a rising stock market.
For the first time since 2022, the weight of the"Magnificent 7" in hedge fund long portfolios decreased. Similarly, mutual funds increased their underweight position in the group, moving from 660 basis points in the first quarter to 671 basis points in the second quarter.),"taking advantage of its underperformance in the first part of the year to add exposure at a more attractive valuation,” Goldman’s note states.
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