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Hedge funds have bought the dip in technology (NYSEARCA:XLK), (VGT), (IYW), (IXN) after yesterday’s dip, Goldman Sachs data showed.
As the S&P 500 (SP500) had its worst rout in almost two years on Monday — reaching 5151.14, down 3% — the technology sector (XLK) dipped to 191.19.
But according to Goldman Sachs’s brokerage data, hedge funds have bought the most tech stocks in one day since mid-June. Almost all tech subsectors were net bought yesterday, aside from tech hardware, led by semiconductors (SMH), (SOXX) and semi equipment (SP500-4530), and software (IGPT), (XSW).
However, hedge fund positioning in the information technology sector (XLK) is still around the most underweight in more than 10 years, Goldman analysts said.
According to J.P. Morgan’s quantitative and derivatives strategists, there was $14B of institutional net buying around the market hours on Monday.
Also, North America was the only net bought region, Goldman Sachs’ FICC and Equities report said. The most U.S. buying came from single stocks, led by the info. tech (XLK) stocks — the biggest net purchasing of U.S. single stocks since March.
Jonathan Caplis, CEO of hedge fund research firm PivotalPath, said that hedge funds are seeing this sell-off as a buying opportunity. “The majority of the managers we speak to are framing the current problems as short-term and sentiment-driven, versus a long-term issue with the fundamentals of listed businesses or even the wider U.S. economy.”