Hedge funds net buyers of equities for sixth straight week: BofA

Hedge fund clients increased their net purchases of global equities for a sixth straight week, Bank of America’s latest weekly fund manager survey showed.

The data, released on Monday, indicated that institutional investors continued to favor equities over other asset classes, with net buying reaching its longest streak since early 2023. Hedge funds were net buyers across major regions, including North America, Europe and Asia, reflecting broad-based optimism about corporate earnings and economic stabilization.

Bank of America’s survey, which tracks flows from over 200 hedge funds managing approximately $800 billion in assets, highlighted that equity allocations rose to 48% of portfolios, up from 46% the prior week. Cash levels declined to 4.5%, the lowest since February 2022, as managers reduced defensive positioning.

The shift toward equities comes amid improving risk sentiment, with investors citing expectations of softer inflation data and potential Federal Reserve policy adjustments. However, concerns over geopolitical tensions and uneven economic growth tempered overall risk appetite.

By sector, technology and financials led net inflows, while energy and utilities saw modest outflows. The survey also noted that global fund managers’ cash holdings remained below their long-term average, signaling continued preference for risk assets despite lingering uncertainties.

Bank of America’s data underscores the resilience of institutional demand for equities, even as broader market volatility persists.