Global hedge funds increased their trading activity in Asian markets last week to the highest level seen in over five years, according to a note from Goldman Sachs.
Between June 6 and June 12, hedge funds boosted both buying and short-selling positions in Asia. Bullish bets reached their strongest point since September 2024, surpassing bearish wagers.
Goldman Sachs highlighted that hedge funds were actively purchasing stocks in Japan, Hong Kong, Taiwan, and India. However, they were short selling onshore Chinese equities. This mixed approach reflects cautious optimism amid ongoing market uncertainties.
Asian stocks continued their robust rally in June. Optimism grew following high-level trade talks between the U.S. and China in London, which raised hopes of easing the trade war.
Additionally, South Korea’s election of a market-friendly president attracted more capital inflows to the region.
Market experts also noted a trend toward de-dollarization. Investors are diversifying away from the U.S. dollar to hedge against its potential decline, benefiting broader Asian markets.
Kier Boley, co-head and CIO of UBP Alternative Investment Solutions, said, “International investors might start rotating back to their own markets or to Asia, which has been underappreciated.”
The MSCI Asia-Pacific Index has gained 2.5% so far this month, led by strong performances in Korea and Taiwan. Since April 7, the index has surged 24%, supported by a 90-day pause on increasing U.S. tariffs and progress in trade talks.
Goldman also reported that the share of developed Asian markets in hedge funds’ total exposure rose to 9%, placing it in the 94th percentile over the past five years. This indicates a significant shift in hedge funds’ focus toward Asia.
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