Key insights
- Goldman Sachs reports systematic hedge funds (CTAs) bought equities at a record pace, adding $86 billion in exposure. This surge, driven by trend-following algorithms, suggests continued bullish sentiment and potential for further gains. Goldman estimates CTAs could add another $70 billion in exposure over the next five sessions, mirroring buying patterns seen in previous periods of market rallies. This could fuel further short-term upside in US equities.
Investing.com -- Systematic hedge funds have snapped up equities at unprecedented speed over the past week, adding $86 billion in exposure, according to a note from Goldman Sachs published late Thursday.
Goldman said these algorithm-driven funds, often called CTAs, bought stocks at a pace that ranks among “the largest in history” over the last five trading sessions.
The bank noted that since markets turned higher at the start of April, hedge funds, especially those that trade systematically, have been buyers, positioning for further gains in global equities.
The surge comes as stocks hover near record highs and head for their third consecutive week of gains, with investors watching for developments that could bring a near-term resolution to the Middle East conflict.
Goldman highlighted that the rate at which CTAs have accumulated equities over the past week sits in the top five buying speeds of all time.
The bank’s models estimate that these trend-following speculators could continue to buy stocks and potentially add another $70 billion of exposure over the next five sessions.
The buying intensity is said to mirror previous episodes of aggressive CTA accumulation seen in August 2024, November 2023 and September 2019, according to Goldman.