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Hedge Funds Capitulating Buy Most Stocks Since 2010

Hedge funds trailing the Standard & Poor’s 500 Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years.

A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points.