Hedge funds have diminished their publicity to Nvidia (NASDAQ:) and the broader “Magnificent 7” group of tech shares throughout the second and third quarters of 2024, in response to a current evaluation by JPMorgan.
This trimming of positions is available in distinction to the bullish sentiment seen amongst retail traders, particularly forward of Nvidia’s earnings report.
JPMorgan’s analysts highlighted a cautious strategy by hedge funds and lively fairness mutual funds towards U.S. tech shares, significantly Nvidia.
This warning is clear within the discount of positions following a peak within the first quarter of 2024.
“A lower Nvidia exposure may have been a factor behind Equity Long/Short hedge funds’ positive performance in July despite the significant Nvidia stock price correction during that month,” mentioned JPMorgan.
The financial institution famous that whereas hedge funds had been chubby on Nvidia earlier within the 12 months, they started decreasing their positions within the second quarter, a pattern that continued into the third quarter.
The decrease publicity to Nvidia is claimed to have proved useful for Fairness Lengthy/Brief hedge funds in July, serving to them obtain constructive returns whilst Nvidia’s inventory confronted downward strain.
In the meantime, JPMorgan says retail traders have proven robust bullishness towards Nvidia and tech shares total, as seen within the continued inflows into fairness funds and thematic ETFs that closely function Nvidia.
The recognition of single-stock Nvidia ETFs, which frequently present leveraged publicity, can be mentioned to underscore this retail optimism.
JPMorgan’s report highlights the contrasting methods between institutional and retail traders within the present market surroundings, with hedge funds adopting a extra defensive stance whereas retail traders proceed to wager closely on tech, significantly Nvidia.
