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Money managers under the microscope

ML note – hedgies sell equities

July 14, 2009

Bank of America-Merrill Lynch’s latest “Hedge Fund Monitor” note shows managers are aggressively selling equities and building a record net long position in 2-year Treasuries.

rtxcfqpAccording to the note, hedge funds last week continued to decrease aggressively their net long position in S&P 500 futures and added to net shorts in the Russell 2000.

In commodities they held onto their “crowded longs” in gold but added marginally to net shorts in copper, while in energy they cut their net long positions in crude oil and heating oil and marginally covered crowded shorts in natural gas.

Elsewhere, they added to shorts in 10-year Treasury notes and built a record net long in 2-years.

Meanwhile, market neutral funds’ market exposure dropped last week, while long/short funds are now modestly underweight equities.


The story is misleading. Having read the original note, Mary Ann Bartels states that macro hedge funds have been selling equities – not all hedge funds as your headline claims. Moreover, the BofA report is flawed because it is based on the Commitment of Traders reports from the CFTC. This report does not yet distinguish between prop desks, hedge funds and other non-commercial traders.

Posted by hedgie | Report as abusive

You’re right that the note does refer to macro funds further on, although in the summary it refers simply to hedge funds or “large speculators”. But clearly it is not all types of hedge funds that are selling equities.

Posted by Laurence Fletcher | Report as abusive

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