It appears that retail investors are once again outsmarting their much better paid hedge fund peers.
After 5 straight weeks of selling by hedge funds, during which we saw an unprecedented offsetting buying spree by retail investors which surpassed even the euphoria seen at the peak of the meme mania in 2021 (see "Retail Euphoria Breaks All Records, Steamrolling Bearish Hedge Funds") Goldman Prime writes that hedge funds bought US equities every day this week and at the fastest pace since early November, as single stocks saw the largest net buying in more than 3 years.
Positioning corroborates last week's tech-driven squeeze, with Fundamental L/S Gross leverage (a proxy for short bias) falling -1.5 pts from an all time high (as a reminder, hedge funds were extremely short in January, and built up their bearish position entering February) to 205.9% (99th percentile three-year), while US Fundamental L/S Net leverage (an indicator of overall net exposure) decreased far less, by -0.1 pts, to 56.5% (94th percentile three-year). US Fundamental long/short ratio rose +0.3% to 1.756 (41st percentile three-year).
