Hedge Funds Bail From Stocks as Powell, Covid Roil Markets
- Index of expensive tech stocks plunged 7.1% on Wednesday
- Pros under pressure to preserve performance into year-end
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Add professional traders to the ranks of investors bailing from stocks as anxiety over the omicron variant and monetary policy roil markets.
Hedge funds, which use borrowed money to amplify returns, have gone risk-off in a major way just as the S&P 500 endured its biggest two-day rout since October 2020. Net leverage, a measure of industry risk appetite that takes into account long versus short positions, fell to a one-year low this week, according to data compiled by Goldman Sachs Group Inc.’s prime brokerage.